Avalanche has announced that it is now hosting Multiswap by CavalRe. Multiswap is essentially a unified liquidity protocol that enables users to swap multiple tokens in a single transaction. It has performed miracles on the testnet by registering 340 token swaps in a single transaction. The exchange mechanism, identified as a new breed of multi-asset, aims to redefine how users access on-chain tokens and exchange them on a platform.
CavalRe has chosen Avalanche for the benefits that it brings to the table. Flexibility and speed of transactions are the two crucial factors that facilitated the partnership. Users can now swap a hundred tokens in a single transaction.
Details mentioned in the announcement highlight that there is no restriction on how many tokens can be part of the pool. This means that even off-chain tokens can enter the pool, making it convenient for traders to swap their preferred pairs.
The demonstration held by CavalRe showcased over 500 tokens of the S&P 500. These were present in a single pool, allowing traders to create 125k trading pairs. Such a pool is expected to benefit liquidity providers (LPs) as well. Also known as LPs, the providers can earn a yield from transaction fees. A clear portion for the same is not yet public; however, it has been clarified that there is scope for them to bag a decent yield for their wallets.
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Yields have been introduced to replace the fees that they would otherwise pay to an asset manager. Moving forward, Multiswap will work to introduce foreign exchange, equity markets, and commodities. The mainnet will see a pool consisting of 10 blue-chip tokens representing 55 trading pairs.
Eric Forgy, the person behind Multiswap, has called the project groundbreaking, adding that it will allow everyone to swap tokens while exploring other features they will introduce in the coming days. Eric has also called this an engine of what is about to come in the CavalRe ecosystem, mostly to power the capital markets.
We need to accommodate future cash flows, said Eric in a statement before quoting that Multiswap is the first step on a roadmap. Meaning, there are many more possibilities that will open up as CavalRe moves forward in time. This includes futures and derivatives to ultimately venture into reinsurance securitization and risk transfer.
The Head of DeFi and DevRel at Ava Labs, Luigi D’Onorio DeMeo, has conveyed confidence in CavalRe by stating that their reimagination of AMM demonstrates what a creative team is capable of when equipped with sufficient power, speed, and flexibility. Luigi has also stated that they are eager to learn the mechanism’s performance results after financial institutions have investigated its potential.
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It was the Great Financial Crisis that encouraged Forgy to fix capital markets. This is a mission that is mutually shared with CavalRe, making Multiswap its first release.
