Let’s Do Algebra on QuickSwap!
Nearly 100% Voted to Move Forward with a V3 ‘Concentrated Liquidity’ Model
On June 28th, 2022, QuickSwap made history when nearly 100% of our community voted in favor of moving forward with a V3 ‘Concentrated Liquidity’ model. We’re thrilled that you’re ready to take this tremendous leap forward with us as we prepare to implement the most significant upgrade in QuickSwap’s history. Now that the vote is complete, we are proud to announce that Algebra is the development team behind the V3 license we’re acquiring. We couldn’t be more excited to continue building the future of DeFi with this incredibly talented team and community.
- On June 28th, 99.98% of QUICK and dQUICK holders voted to move forward with a V3 ‘Concentrated Liquidity’ model
- The details about how our V3 will work and why a V3 is a necessary component in QuickSwap’s evolution can be found here
- We negotiated terms to acquire an exclusive license to use Algebra’s superb V3 Concentrated Liquidity model on Polygon and future Polygon-enabled chains
- We have now begun converting funds from our treasury into stables to pay for the audits we need to ensure the protocol’s security
- Our V2 will continue to operate side-by-side with our V3 for as long as it has users and LPs
- We anticipate launching our V3 ‘Concentrated Liquidity’ model in Q3 of this year
- Nothing will happen overnight
- For the time being, QuickSwap’s users don’t need to do anything
- We will provide more details about the audit, launch date, and how to use our V3 very soon
Dragons are good at maths
When Algebra’s social media team started poking the dragon on Twitter in March 2022, we’ll be honest, we didn’t care for it. But we remembered a time not too long ago when QuickSwap playfully took aim at a protocol much larger than ours, so we didn’t take it personally. Later that month, at the Polygon Ignite conference in Dubai, we had the pleasure of meeting Algebra’s co-founders and learning more about the math behind the protocol.
We already knew that capital-efficient V3 DEXs were quickly gaining ground, as UniSwap’s V3 launch on Polygon had clearly demonstrated. We also knew that nearly half of liquidity providers on UniSwap V3 were losing money due to impermanent loss. Our perception was that ‘concentrated liquidity’ models tended to benefit active “smart money” managers at great detriment to average LPs. Because QuickSwap has always been focused on serving the community, we were opposed to the idea of a V3 “taking from the poor to give to the rich”.
When we expressed our concern to Vlad and Alexandra, they quickly explained that due to Algebra’s dynamic fee model, which calculates the fee depending on numerous factors, liquidity providers don’t need to actively move their liquidity between pools to earn the highest rewards. Instead, liquidity is traded based on the specific price range that the LP chooses, meaning the fees earned are the best on the market and impermanent loss is minimized. Further, LPs can allocate their capital to preferred price intervals to consolidate their funds and earn additional fees, so even small LPs can profit.
So you’re saying Algebra offers all the advantages of a V3 without the pitfalls?
It took us a few minutes to process what we’d just heard, but once it sunk in, the idea for QuickSwap and Algebra to join forces and conquer Polygon together was born. Of course, we still needed to know more before we could move forward. That night, QuickSwap’s co-founder and lead developer Sameep Singhania asked our friend Hamzah Khan — Polygon’s head of DeFi — his thoughts on Algebra. Hamzah quickly responded saying, “Algebra is a superb product.”
With Hamzah’s seal of approval, QuickSwap entered into a non-disclosure agreement with Algebra to review their code and see for ourselves. Shortly thereafter, Sameep and QuickSwap’s development team reached the same conclusion that Hamzah had. With help from QuickSwap’s other co-founder Roc Zacharias, negotiations between QuickSwap and Algebra began.
A Tale of Community Governance
Once amicable terms that equally benefited both parties were agreed upon (more detail on this later), QuickSwap opened a governance discussion to talk through this proposed upgrade and gauge the community’s sentiments. The comments in our forum revealed overwhelming support for the proposal, so we quickly moved to vote.
On June 24th, we asked all eligible New QUICK, Old QUICK, and dQUICK holders: Should QuickSwap move forward with a V3 ‘Concentrated Liquidity’ model? Five days later, on Tuesday, June 28th, that vote concluded with 99.98% of voters in favor of the proposal. In total, 22,005.2 QUICK from 106 wallets participated in the vote. Of the 22,005.2 total QUICK, ~22 thousand QUICK from 104 wallets (~98%) voted in favor of moving forward with a V3 concentrated liquidity model. Of the 106 total votes, only 2 wallets (~2%, with a total weight of 5.154 QUICK) opposed the proposal.
Now that the vote has concluded, we’re proud to share with the community that Algebra’s accomplished development team is behind the V3 model QuickSwap will acquire.
We know that we’ve earned the SoonSwap moniker, and we want to assure you that we’ve recently taken substantial measures to improve our speed and efficiency. That said, delays in software development are almost inevitable, and sometimes, audits take more time than we anticipate. Protecting the community is our number 1 goal, and we will make sure all security issues have been addressed before release.
To combat any unforeseen delays, Algebra took it upon themselves to initiate the first audit. On June 28th, Algebra announced that the first audit was completed and passed. We will share the results of that audit very soon.
Now that the vote is over, QuickSwap has begun the process of converting QUICK from our treasury into stables to reimburse Algebra for the audit they already initiated and to pay for the remaining pieces of the audits that we need to ensure the protocol’s security and implement our V3. We are taking extra care to ensure that our sells have little to no impact on QUICK’s price by converting small portions at a time via an OTC desk over the next 45 days.
As mentioned above, we were very careful in our negotiations with Algebra. We wanted to make sure that the deal was fair for both parties. Additionally, because both QuickSwap and Algebra are huge Polygon aficionados, we needed to be certain that our collaboration would benefit the Polygon ecosystem as a whole.
What’s in it for Algebra?
In exchange for an exclusive license to use Algebra’s concentrated liquidity model on Polygon and all future Polygon-enabled chains, Algebra will receive:
- A place in QuickSwap’s well-developed ecosystem
- 1.5% of all trading fees collected from QuickSwap’s V3, V4, and any other Algebra-built implementations until/unless the protocol fee is 10%. Iff we chose to increase the protocol fee by more than 10% (which would require a governance vote), Algebra and the QuickSwap Foundation will share the increase in a 15/85 ratio outside of the share given back to the QuickSwap community
- Access to QuickSwap’s and LDA’s extensive network of industry professionals
- Assistance with marketing, business development, and PR materials
What’s in it for QuickSwap?
In exchange for access to QuickSwap’s extensive network and large user base, QuickSwap will receive:
- The concentrated liquidity technology necessary to get ahead in the fast-paced world of DeFi
- An exclusive license to utilize Algebra’s V3 software on Polygon and all future Polygon-enabled chains
- An exclusive license to utilize any V4 software that Algebra may produce on Polygon and future Polygon-enabled chains
- We hope to also add Algebra’s small but passionate community of supporters to QuickSwap’s large collective of dragon enthusiasts
What’s in it for Polygon?
- The combined power of QuickSwap’s high TVL and Algebra’s superb technology throughout all Polygon ecosystems — present and future
- More efficiently distributed capital within Polygon
- Better liquidity and access to dynamic fees that fluctuate based on volatility for all of Polygon’s DeFi users
- A more efficient Polygon-native and Polygon-focused DEX, which will become the DeFi hub on Polygon
As stated, the first audit to ensure Algebra’s security is complete. We will publish the results of that audit very soon. The second audit is now underway. We’ve contracted the auditing firm to expedite the second audit, and we anticipate the results in the coming weeks. As soon as we have those results, we will share them with you. When both of the audits are complete, our development team will work with Algebra’s development team to integrate Algebra’s V3 ‘concentrated liquidity’ model on our UI.
Additionally, QuickSwap has already begun working on an internal aggregator that will allow traders to swap using our V2, V3, or both without ever knowing the difference. You can read more about that in this blog.
Once we’ve integrated Algebra’s V3 on QuickSwap’s UI and finished our aggregator, we will launch our V3 on dev net for experimentation. We will rely on testing from our team and select community members — maybe even you! After we’re satisfied with the testing, we will launch the V3 on our main UI. We expect to have our V3 fully implemented sometime in Q3 of this year (2022), but please remember…
Doing Algebra on QuickSwap
We couldn’t possibly be more excited to implement the most significant upgrade in QuickSwap’s history, but we want to remind everyone that changes of this magnitude cannot happen overnight. First, our auditors need to diligently review Algebra’s code to ensure there are no security vulnerabilities. Once the audits are complete, our development teams will need some time to integrate Algebra’s V3 into our UI and test it.
As we get closer to the V3 launch, we will create and distribute all of the educational materials you’ll need to do Algebra on QuickSwap.
In addition to launching a V3, QuickSwap is also adding several new features to enhance users’ experience on our DEX.
Currently, we have a governance vote about if we should introduce an isolated lending and borrowing market, which will generate increased community economic activity, increase yield opportunities, and create an additional revenue stream in a bear market. That vote will conclude on Thursday, June 30th. Learn more about it here.
If you weren’t eligible to participate in these votes, don’t fret! QuickSwap recently announced DragonFi: Your One-Stop Shop for DeFi on Polygon with plans for multiple exciting integrations that are yet to come!
Whether you’re new to QuickSwap or a seasoned veteran dragon, we invite you to join us across all of our social media platforms, and come let us know what you’re thinking anytime!