OpenSwap Troll Talks: Chapter #12 — Booster Queue
- OpenSwap introduces Booster Queue — a new technology to enable projects to carry out self-service funding rounds with the bonus of a guaranteed buyback
In the previous articles, we covered a bit more about our Open Interchain Protocol, in particular, Single Asset Bridge Vaults and the Troll Selection Algorithm. For this week’s Troll Talks, we want to begin introducing our beloved trolls to a new OpenSwap key technology that was discussed during the Chainlink AMA a couple weeks ago — Booster Queue — a cool new technology that will be released soon.
In this chapter, we will dive deeper into Booster Queue, and other related liquidity queue types, and discuss what applications these technologies can potentially have. We might even have our first Booster Queue user before the series ends. Stay tuned to not miss any of these exciting updates!
What is Booster Queue?
In essence, the Booster Queue is an exciting, upcoming type of liquidity queue that aims to help projects carry out funding rounds on-chain with transparently controlled vesting, whitelisting, and guaranteed buyback conditions.
An example of an application: Orange Swap wants to raise funds to develop a killer feature — e.g. the Ultimate Juicer. Now they could leverage OpenSwap’s set of technologies to raise additional funds to make it happen. A booster queue consists of 3 queues: Sales Queue, Buy-Back Queue, and Redemption Queue. And here are the simplified steps for how a Booster Queue is applied:
- The Orange Swap project with a native token of (ORANGE) first deposits the amount of tokens they would like to sell in the Redemption Queue and collateral project tokens into the Buyback Queue. Then could set up a Sales Queue, where whitelisted users can purchase the booster-version of their token (bORANGE). A part of the proceedings would be sent to the Buyback Queue and the rest would be sent to the project.
- Before the redemption date, bOrange holders can choose to sell their bOrange tokens using the AMM pool at the market price for the bOrange tokens. Non-whitelisted investors can also take part in the buying or selling of bOrange tokens if the project allows.
- If it goes well as planned, the bORANGE token holder can redeem for ORANGE at the redemption date at the redemption queue. Here, the Orange Token in the Buyback Queue will be returned to the Project. Otherwise, these buyers can opt to use the Buyback Queue (something that we will talk about next week), to get a portion of their investment back, say for example 80%.
This is a very flexible piece of technology where projects can adjust parameters according to their needs. Therefore, the above example is just one of the many ways other DeFi projects can use the Booster Queue technology.
How Projects and Investors can Benefit
In this application, projects can have several benefits compared to more traditional methods like selling their own project tokens directly or finding a VC to fund their projects, which is not easy and comes with additional conditions.
The most apparent benefit of using the Booster Queue technology is that projects can raise funds without bringing on immediate sell pressure since there is vesting. Projects may utilize other OpenSwap features to reap additional benefits such as Buyback Queues, to provide more assurance to investors.
From the investors' standpoint, it is also better than directly buying project tokens off the market. In order to attract buyers, the project may likely be selling these vested tokens at a discounted price, so more bang for your buck! There is also the buyback guarantee to limit the risk of these offerings, preventing this investment from ‘going to zero’. More tech-savvy investors can even independently review the smart contracts to safeguard the integrity of this swap agreement.
That’s it for this chapter of Troll Talks. We hope that this chapter helped sparked your interest in knowing more about our latest and upcoming offerings. Next week, we will be covering the Buyback Queue technology and how it compliments our liquidity queue in the upcoming chapters. Stay tuned for updates and in the meantime, stay safe!
OpenSwap is the world’s first DEX providing on-chain swaps at zero slippage with hybrid smart routing, and a single asset crosschain bridge. As the DeFi universe continues to expand, liquidity becomes increasingly scattered across multiple chains and the situation is poised to get worse as new chains emerge with individual DEXs on each chain. The OpenSwap team has been working for the past several months on building up a vision of a greater OpenSwap ecosystem that will become every crypto project’s BFF through a set of key offerings that will empower teams to establish funding and sustained token health, allowing teams to focus on what they do best — BUIDLing.