In the field of decentralized finance (DeFi), BonkSwap, as an independently owned automated market maker (AMM) decentralized trading platform, has attracted widespread attention since its launch in April 2023. BonkSwap combines simple functions with the cooperation of Hxro Network and launches the "BonkOrBust" game to provide users with a brand new trading experience. BonkSwap is powered by Gobi Labs’ AMM software and aims to become the core infrastructure of the $BONK ecosystem.
The current situation of BonkSwap
Currently, BonkSwap’s total lock-up value (TVL) has exceeded US$1 million, mainly concentrated on the BONK/USDC and BONK/SOL trading pairs. BonkSwap is a "constant product" AMM, not a centralized liquidity AMM like Orca. This article will delve into the characteristics of these two AMMs to help users better understand their advantages and disadvantages.
Main functions: BonkSwap currently provides five main functions:
Token exchange
Users can conduct direct token swaps between BonkSwap’s various liquidity pools as a standard trading process.
Liquidity Provision: In the Liquidity tab, users can provide liquidity for multiple supported token pairs. Users who provide liquidity may be rewarded with esBONK (Escrow Bonk) tokens in certain pools.
esBONK Staking: Users can stake their esBONK to unlock $BONK over time. This feature encourages users to hold and participate in the ecosystem for the long term.
DCA (regular fixed investment)
The DCA option allows users to invest $BONK tokens on a "periodic basis" basis and receive additional $BONK rewards during the long-term DCA period.
BonkOrBust Game: BonkOrBust is an independent website, powered by Hxro Network, that allows users to predict the price trend of multiple tokens, and users who guess correctly will win a prize pool. Part of the prize pool will also be distributed to Hxro token holders and the BonkSwap platform.
Transaction Fees: BonkSwap’s current transaction fees are distributed as follows:
0.1% allocated to BonkSwap liquidity providers
0.15% allocated to rewards
0.025% allocated to BonkSwap Foundation operating expenses
0.025% allocated to BonkSwap development partners (Gobi Labs)
This transparent fee structure not only contributes to the sustainable development of BonkSwap, but also incentivizes the participation of liquidity providers.
The future of BonkSwap
Going forward, BonkSwap will focus on updates to core functionality, especially the introduction of a liquidity provider reward mechanism through esBONK. In addition, BonkSwap plans to start integrating novel games and use cases for $BONK, with BonkOrBust being the first example of this concept. The fees generated by these games and apps will be used in part to fund liquidity provider rewards, creating a true revenue cycle rather than the inflationary model common in most liquidity rewards.
Summarize
As an emerging DeFi platform, BonkSwap is gradually becoming an important part of the $BONK ecosystem with its easy-to-use functions and innovative reward mechanism. With the launch of more features in the future, users are expected to gain a richer trading experience and higher capital efficiency on BonkSwap.
Before proceeding with liquidity provision or investment, we recommend users to thoroughly research the various options in order to make an informed decision. BonkSwap has unlimited development potential and deserves the attention of every user interested in decentralized finance.