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FAQ

What is InterSwap?​

InterSwap is the first omnichain liquidity unification layer on Axelar.

In simple terms,

InterSwap facilitates the seamless movement of assets (both 1:1 and non-1:1) across chains and dApps directly in their native form (no wrapped/synthetic).

It's designed using a concept called “UNIFIED LIQUIDITY” wherein the same pool is connected with all the chains unlike existing design models (Lock & Mint and Burn & Redeem). This results in better rates, low transaction reversion, lower slippage, and a near 1-click experience. Overall, seamless user experience and optimized capital efficiency.

Other standout features include the likes of single asset/sided liquidity provisioning, custom/permissionless liquidity pool creation, fiat liquidity provisioning, and Cross-Chain Smart Routing (CCSR).

InterSwap is built on Axelar Infrastructure that facilitates trustless communication between source and destination chains thereby making it ultra-secure and MEV resistant

How is InterSwap different from Bridges?​

Suppose a user wishes to swap/send an asset A from source chain C to asset B, in destination chain D.

Based on the existing cross-chain solutions today, it can be achieved in the following ways:

1. Bridge ( Lock & Mint and Burn & Redeem) and aggregators:​

The essence of this mechanism is that it requires an intermediary/wrapped asset to complete the transaction.

The user sends asset A to the bridge contract. Wrapped A (wA) is then issued/minted against A in the destination chain. wA is then again swapped against B (needs to have liquidity for wA and B).

In the reverse process, B to wA. wA is then burned and equivalent A is unlocked from the bridge contract to claim at the source chain

Aggregators are a UI-level unification layer that lists out several options (or bridging options) based on different KPIs viz., rate, fee, time, slippage, etc. It doesn't fundamentally solve the crux problem rather aims to give a better UX in terms of aggregating all the providers in one place

Problems:

  • No direct native asset rather wrapped
  • Multiple steps (approvals, swapping from wrapped to native and vice versa, multiple UIs external and internal combined )
  • Risk of transaction reversal in the absence of enough liquidity on the destination chain
  • High cost due to gas fee at several stages including in the event of transaction reversal
  • Risk of exploit due to custodial asset holding in bridge contract

2. CEXes:​

User sends asset A from source chain C to CEX and then draws back asset B in the destination chain D. In some cases its not direct D rather some intermediary asset which is further swapped to B using some dApp

Problems:

  • Back and forth between dApp and CEX
  • Long KYC process/approval time
  • Custodial asset holding

What is the protocol fee structure?​

For non-1:1 asset swap: 0.3%

For 1:1 asset swaps: 0.05 - 0.06%

How does InterSwap ensure security​

At protocol level,

  • It has non-upgradeable smart contracts that prevent architectural changes
  • Unified Liquidity model inherently eliminates legacy bridge risks

At the Infrastructure level (powered by Axelar),

  • Trustless cross-chain communications
  • MEV resistant

As best practices,

  • Following standardized coding practices
  • Internal audits
  • Multiple independent external audits
  • Periodic audits in the event of contract-level changes/deployments due to product-level changes

Token and its utilities​

The native token of InterSwap is $ISWAP, an ERC20 standard. The core purpose of ISWAP would be:

  • Liquidity provisioning
  • Staking and Staking rewards
  • LP rewards
  • Governance

What is Automated Market Maker?​

An automated market maker - is a type of decentralized exchange where trading is facilitated by liquidity pools, instead of using traditional buyer/seller markets and orderbooks.

  • Anyone can create a trading pair (pool) or add liquidity to existing pair.
  • Liquidity providers earn commissions from each trade inside pool of two assets depends of their share in pool.
  • Quote of the pair is calculated by reserves of each asset in the pool (From the constant product formula it follows that the price of that token A is simply price_token_A = reserve_token_B / reserve token_A).

It enables permissionless automated decentralized exchanges. It's trully innovative idea, which launched the entire DeFi market.