The Problem, and Seedling's Solution
In the aftermath of the Initial Coin Offering (ICO) craze of 2017-2018, which saw many of unworthy projects raise and misuse billions in retail investor funding, new projects increasingly used Initial Exchange Offerings (IEOs) to increase their trustworthiness in the eyes of potential investors. However, many of the requirements of IEOs stifle some projects which may not be accepted by the exchange for listing. The solution to this was the creation of Initial DEX (decentralized exchange) Offerings (IDOs) as pioneered by platforms like Uniswap.
While IDOs on Uniswap certainly decreased the initial expense for a project’s token listing, that convenience came at a steep cost. The crypto community quickly adjusted to this new token launch mechanism. Savvy investors began to front-run listings immediately after a large amount of liquidity was provided to a Uniswap pool. Some would purchase the entire pool in one swoop, causing the crypto asset to soar in price as others attempted to do the same. The term “ape in” to a liquidity pool was born to describe those who turned up the gas on their MetaMask wallet to buy out entire pools of newly-created tokens at lower prices before others did the same.
The above in turn produced wild volatility and left many investors shell-shocked, additionally, this approach suffers from other significant downsides, most notably;
- 1.Projects need to provide liquidity on both the asset for sale (base currency) and a quote currency (usually ETH) for it to initially trade against.
- 2.Automated market makers, such as the one powering Uniswap, would dynamically adjust the asset’s price based on supply and demand.
- 3.Increasing popularity and usage of platforms such as Uniswap reinforced scalability issues, with Ethereum network fees skyrocketing and slow platform performance, leaving end-users frustrated.
Users are increasingly demanding;
- Cheap transactions
- Secure, ultra-fast swaps
- User-friendly design
- The possibility to buy and move assets between blockchains
The key features of Seedling are the possibility of making both fixed swap pools and cross-chain swaps, powered by the Cherry Network, which can provide higher throughput for faster and cheaper transactions while staying connected to the Ethereum Network and other blockchains for liquidity. The future of decentralized finance won’t be tied to one chain and interoperability is already becoming a must-have feature of the DeFi future