At the time of writing, Cardano‘s price had declined from $1.55 to $1.45 after reaching an all-time high of $1.63. Before the announcement of SundaeSwap, the first decentralized finance (DeFi) exchange to be built on the Cardano blockchain network, Cardano’s price jumped by 13%.
According to Cardano, there are ongoing projects on the Cardano blockchain network. These initiatives attempt to use blockchain technology to create a new financial market (DeFi). While SundaeSwap has set a date for its launch on Thursday, January 20th, 2022, another Cardano DEX project, Minswap, has developed a date for its test network launch.
Cardano’s DEX SundaeSwap
On Thursday, SundaeSwap announced that it would be debuting on the Cardano blockchain on its official Twitter account. It will be the first Cardano-based decentralized exchange (DEX). The project’s developer verified this new development in a blog post. Following the launch, multiple projects will be allowed to build trade pools for the available tokens, according to the team.
SundaeSwap, like other DEXs, will be powered by a native token (SUNDAE). It will provide its users with a digital smart contract to trade tokens. Users can participate in yield farming, which lets them share a percentage of trading fees with liquidity providers on the site.
SundaeSwap’s native token (SUNDAE) can also be earned as a prize in the first six months after the platform’s introduction. The initial launch will have restricted capabilities, and trading will be limited to hours to days for a short time.
SundaeSwap’s smart contract has been thoroughly inspected to guarantee that it fulfills industry security standards. SundaeSwap’s team claims that they won’t be introducing fully decentralized governance immediately because of transaction constraints on the blockchain.
Decentralized Exchange (DEX) On Cardano
In the crypto markets, decentralized exchanges are highly valuable. The market capitalization of Uniswap, a DEX based on the Ethereum blockchain, is $7.7 billion. The market capitalization of Binance Smart Chain PancakeSwap is $3.2 billion.
Like Minswap, a DEX developed on Cardano will be community-driven. On the Cardano blockchain, there will be a smart contract to improve the external security audit of DEXs. The DEXs will work tirelessly to ensure that exchange wallets are fully integrated into the platform.
Since these DEX projects are still in their early stages, just a few features are available. However, yield farming and the smart contract will be two of SundaeSwap’s most essential features. Cardano also makes obtaining liquidity easier by offering liquidity to consumers while compensating the liquidity providers.