There have been a lot of DeFi projects popping up on the Binance Smart Chain. Many of them have such strange names that it is often hard to take them seriously. I mean, who would ever seriously consider a DeFi protocol such as the likes of Pancake Bunny, Goose Finance, just to name a few? Well, it turns out there is another project that has an even stranger name, and that would be Swamp Finance.
Yes, I know what you’re thinking, but don’t judge a DeFi project by its cover. After all, two of the biggest DeFi projects on Ethereum are named Aave (Ghost) and Uniswap. Besides, Swamp Finance does have rather interesting economic and tokenomic features that I’m sure any investor would like to know about. So, let’s dive down into this Swamp Finance review, shall we?
What is Swamp Finance?
Swamp Finance is a yield optimizer. This enables yield aggregation for holders and users holding its native token, SWAMPY token. Basically, you provide liquidity between two tokens on any other DEX or DeFi project such as PancakeSwap, ApeSwap, or on Swamp itself.
You will then receive LP tokens for that liquidity, which you then deposit those tokens onto the appropriate Swamp vault pool. For example, if you provided liquidity for CAKE- BUSD on the PancakeSwap DEX, you deposit the LP token that you would receive from that pair into the Swamp pool that has a CAKE/BUSD LP pool.
To facilitate automatic yield farming and compounding, as well as greater transaction fee efficiency, Swamp uses the vault pool mechanism. This allows easy yielding without having to have extensive knowledge of the underlying protocols that support automation and yield optimization.
The project was launched back in early April of this year, so it's a relatively new protocol.
Swamp Vaults & Fees
Swamp Vaults are designed to save user’s time via efficient gas usage, frequent compounding, and creative automation. When a user deposits to a Swamp Vault, the user will grow over time and does not need to worry about reinvesting his/her gains manually. In addition to that, you are given SWAMP tokens for depositing your LP tokens on the Swamp protocol.
All vaults, including SWAMP vaults, have a deposit fee of 0.1%, which are then distributed to vault depositors). However, all other non-SWAMP vaults have an additional fee of 4%. 2% of performance fees go to buy back SWAMP and burn them. 0.2% of performance fees will be used for network transactions, and lastly, 1.8% go to platform operators.
Tokenomics & Governance
The native token is Swampy or SWAMP and its total max supply is only 2 million, pretty low for a protocol. However, not all of its tokens are in circulation. Only 10,420 SWAMP tokens were pre-minted. Approximately 5,479.452 SWAMP tokens are minted per day or 0.1902587519 per block.
As previously mentioned, 0.1% of deposit fees from all vaults will be used to buy back SWAMP tokens and burn them. This means that the protocol’s token is deflationary. Every time someone makes a deposit on one of the vaults, there will be fewer SWAMP tokens.
The SWAMP token is also the project’s governance token, but users should be aware that it’s not sufficient to simply buy some SWAMP token and hold it in their wallet. According to their documentation, SWAMP tokens held in the SWAMP Vault will be their governance token. This means that any SWAMP being held in a wallet cannot be used to participate in governing.
A SwampDAO is also in the works, and it is expected to go live sometime in June of this year. Users will need a minimum of 1,000 SWAMP to create new community proposals.
Security and Auditing
When it comes to security, the team has advised all users to do their own research before becoming involved in either Swamp Finance or in any other DeFi project. In their Docs section on Swamp Finance's site, they highlight the risks of impermanent loss, as well as potential scams and cases of theft. In addition, they have also mentioned the issue of 3rd party risks, which they have mitigated by splitting vaults into individual yield farms.
Now, advising users about the risks and dangers of using their protocol is all well and good, but a seasoned user would already be aware of them, and many will not be so comfortable about the warning. Luckily the team behind this project has also completed an audit.
Swamp Finance has recently gone through its first audit by TechRate, which you can find the audit report by clicking here. For added security, they have also scheduled for a second audit to take place sometime soon by Certik. For now, there is a Skynet system connected to the project and scanning it for any vulnerabilities. To view its rating, you can click here.
What does Swamp Finance's Roadmap Look Like?
Securing the project via two audits is all well and good, but does this project will have the ambition and drive to succeed? What is the plan? Does it even have one? Well, you can get a good idea of where they are heading by viewing their 2021 roadmap. You can see that by clicking here.
As you can see, just by viewing their Q2 and Q3 scheduled plan, it is pretty ambitious.
Despite its very recent launch, it has already achieved much. It can support numerous wallets, including Binance Chain wallet, MetaMask, Wallet Connect, Math, Bitkeep, Onto Data Wallet, Midas Wallet, and Token Pocket.
It has launched more than 100 vaults, pairing various exotic tokens with SWAMP. On May 28, it partnered up with IndaSwap, allowing users to purchase SWAMP tokens with Visa, Mastercard, and more. It also has plans for multi-language support.
But that's not all… It also has plans for Swampy staking pools, going cross-chains, including getting involved in the NFT market! Users will be able to buy NFT Swampies on June 1. This was all happen in the second quarter.
Plans in the third quarter include a lottery, Froggy Swap integration, insurance integration, the upcoming SwampDAO, multi-chain bridge, more audits, as well as establishing an international community. Speaking of which, let us see how popular this protocol is becoming.
At the time of writing this Swamp Finance review, it already has a considerable following on Twitter; roughly 26.5 thousand followers. On Telegram, they have a group of more than 7,000 followers. There are also users following the project on Discord.
This may not seem like much, but when you consider how new the project is, the number of people following it is not bad at the very least – with more users joining it every day.
Who Is This product for?
This project is for anyone wishing to earn high yield farming from various pools for a diverse array of tokens and/or if they wish to help govern the protocol.
Rather uniquely, Swamp Finance has a set of video tutorials such as how new users can set up MetaMask, how to buy Swamp tokens with a credit card, how to buy and withdraw BNB from the Binance Exchange, how to swap BNB for tokens, and more. To get a full view of the tutorial, click here.
Swamp Finance does seem to have potential, but it needs to be noted that it faces extreme competition from a limited number of users. There are other dApps that other similar services and have similar features. These include Goose Finance, Partner Swap, Planet Finance, PancakeSwap, and many others.
Additionally, many users have little not no interest in taking part in governing the project. As the price chart indicates, the Swamp token reached an all-time high of $210 not long after its launch but has steadily been decreasing in price since then. This suggests that users only got the token for the short-term; they waited for the price to skyrocket only for them to sell them for a project.
For users depositing their LP tokens in the vaults, they have been earning Swamp tokens as a reward, but unless they are waiting to govern it, it has little other uses other than for sure them to sell their earned Swamp tokens on the market, further suppressing its price. And this is not unique to Swamp Finance. It has been happening to other Dapps as well.
However, there are a group of dedicated followers who believe in the project and its future and thus, are hodling their Swamp token for the long-term. With the addition of burning some of them through its buyback program, using basic economic logic, it is expected as the price could eventually start increasing again.
Swamp Finance Review – Conclusion
Swamp Finance is one Dapp in a sea of other Dapps on the Binance Smart Chain. And yet, its creepy little swamp monster mascot makes it stand out and pokes the necessary amount of curiosity for users to go into its website to find out what it is all about. With more users entering the DeFi/NFT space, with its burning mechanism and ambitious roadmap, this upcoming project seems to be set to potentially explode in the coming future. It has more than 100 vaults with more on the way; it is developing a multi-cross chain bridge, an NFT marketplace, with other fun features for its users.
As mentioned, it does face strong competition from other Dapps who offer similar services and features. But with the growing amount of value locked in its vaults, it does seem that this little swamp monster has what it takes to eat up and swallow its competitors.
Swamp Finance Review
- Value for Money
- Ease of Use
- Potential for Growth
- New project; potential for high growth
- A growing community of followers
- Good tokenomics; burning mechanism
- Ambition plan for rapid expansion and mass adoption
- Faces extreme competition from other DEXs
- Offers only SWAMP tokens as a reward for depositing LP tokens
- low market cap protocol; not many users will know about it
- Its name and logo discourages users from taking it seriously