SWIM Protocol
{{Infobox company
| name = Swim Protocol
| logo = SWIM_LOGO_TEXT.29fed36e.svg
| founded = May 2021
| founders = Troy Tsui </ref>
| website = www
www
Background
Since the beginning of the year, we’ve witnessed substantial growth in the Solana ecosystem, with TVL on the network reaching peaks of $2.0 billion in the recent days as platforms like Raydium and Serum have attracted an influx of new users eager to experience Solana’s high TPS, low fees, and sub-second transaction finality. Whilst many of the fundamental infrastructure pieces (the Defi “lego blocks”) within Solana are slowly emerging, one missing pillar that remains is cross-chain infrastructure that allows users to easily transfer assets from other networks such as Ethereum and Binance Smart Chain to Solana, and vice versa. Assets bridged via Wormhole have one major limitation in that they aren’t native to Solana. For example, USDT transferred through Wormhole becomes wormhole-wrapped USDT, which is not fungible with Solana-native USDT (USDT SPL). This creates an undesirable two-tier system of wrapped and native assets, fragmenting liquidity and making for a suboptimal user experience. Swim eliminates the need for wrapped assets by allowing users to swap from a native asset on one chain to a native asset on any other supported chain, by combining the ideas established by existing stable asset AMMs with Wormhole’s bridging technology to create a new kind of cross-chain liquidity platform. Currently, a user who wants to transfer an asset into the Solana ecosystem has to first deposit that asset onto an exchange (most commonly FTX) and then withdraw to Solana. The process is relatively cumbersome, slow, and not sufficiently decentralized. With Swim, however, users will be able to do this quickly and seamlessly, in a non-custodial fashion. Swim’s elegant solution to the cross-chain asset swap problem minimizes inefficiency, either in the form of wrapped assets, centralized exchanges, or platform-specific native tokens that are used in some cross-chain AMMs. This novel solution is far more capital-efficient than existing approaches and paves the way for a paradigm shift in the way we approach cross-chain interoperability.
How does Swim work
The protocol provides the following guarantees:
Users will be able to interact with Swim’s liquidity pool with native assets on multiple chains. Initially, only stable asset pools will be created on Ethereum, BSC, and Solana to facilitate trading between these chains. The pools on either chain are connected via Wormhole, which helps to relay transaction requests across chains. When a transaction is received by the Swim smart contract, an algorithm will determine the slippage based on the size of the trade and the pool’s composition, providing an execution price.
Initial liquidity pools planned for Ethereum, BSC, and Solana will allow users to seamlessly swap between these native assets Let’s go through an example to demonstrate how Swim works when a user wants to swap ERC20 USDT for SPL USDC. User connects both Ethereum and Solana wallets to Swim User selects desired amount of USDT (ERC-20) to swap from, and USDC (SPL on Solana) to swap to The USDT ERC-20 is locked on Ethereum Swim understands this via wormhole, determines the correct execution price, and sends the correct amount of USDC (SPL on Solana) to the user
Vision
With Swim, their vision is to create a quick, seamless experience that links between smart contract chains, eventually creating a network of native asset pools on multiple chains through which users can swap seamlessly from one chain to another without having to use wrapped assets or CEXes. With the broader crypto ecosystem rapidly transitioning towards a new, multi-chain paradigm, DeFi applications and liquidity are becoming increasingly scattered across siloed and separate networks. Swim is perfectly positioned to help address this increasing fragmentation and establish itself as a critical piece of infrastructure in the months and years to come. With the rise of BSC, Solana, and others, the community needs a seamless way to bridge native assets. Integration is something that is important to Swim as they are constantly looking to partner with projects to grow the ecosystem (borrow/lending, wallet and dashboard aggregators)