By Fungibles • Published May 14, 2021
Hey everyone, Fungibles here.
We are very excited about the future of BitClout and have been looking for the right companies and creators to invest since the day we arrived on March 28th.
We have deployed over $200,000 in capital into everyone from an artist we like, a celebrity we would hope joins the platform, game accounts, unique individuals that bring a focused skillset, and projects building on top of BitClout and working on models that take advantage of DeFi.
One of these companies we are most excited about is Bitswap. The following is an overview of what they are working on.
TLDR: Decentralized finance will change the world and Bitswap is implementing technologies to make BitClout more decentralized so developers can create the financial products that will help Bitswap become a major player in blockchain and bring control to us users. They took the swap down to focus on these new features and expand their infrastructure.
Disclaimer: This article is provided for general informational purposes only and should not be taken as financial or investment advice.
BitClout is almost done being fully decentralized. This entire space was kicked off in September of last year when Uniswap created an entirely new way to use crypto; where you could not only swap one token into another, but stake your money into a liquidity pool where you could earn 100x the interest you would make in your savings account.
The interest you can make by parking your money in decentralized finance makes you feel like your bank has been ripping you off for decades.
Well it’s because they have. They take all of our money, pool it together and then use this liquidity to make all the money for themselves, by making enormous amounts of interest on out pooled liquidity, or by lending it out to your neighbor to refinance their house.
The bottom line here is that they see all the upside, by leveraging your hard earned dollars, while you see nearly nothing in return.
If you remove the bank and you become your own bank, you remove the middleman and can see the same returns that a bank would get.
When Uniswap launched liquidity pools, not only did it solve the issue that crypto had when it crashed in 2017 because now these companies had liquidity underneath them; it created entirely new categories of financial products, from borrow/lend protocols to yield farming, collateralized NFTs, and passive income tokens, changing the future of finance forever and helping to start spreading out the wealth from the haves to the have nots.
Like Uniswap, the Bitswap Decentralized Exchange provides the same technology where you can swap out a token for another one. In Uniswap’s case you can swap from Bitcoin into Ethereum. Technically, it’s wrapped Bitcoin - also known as wBTC. Wrapped BTC is basically a token that works on the Ethereum blockchain and pegs to the price, (or as close as possible to the price) of the real Bitcoin on the Bitcoin blockchain, similar to how we see the price of BitClout rise or fall with the price swings of Bitcoin.
While Bitswap is similar to Uniswap in that you can swap BitClout into Ethereum or vice versa, it has lacked 3 of the most important features:
AMM: Also known as ‘automatic market maker’, this automates the ability to trade, much like you can buy stocks and they rise and fall based upon buying or selling. You are not buying these stocks from another person sitting at the other end of the internet, but rather from a pool of available shares that are kept in an order book on the exchange. Right now Bitswap is really an interface that interacts with your wallet to take your Ethereum into BitClout or BitClout into Ethereum, with the key difference being it is more a matching service between one specific buyer and seller, which is like a person sitting on the other end of the internet. While they have automated the swap process and provided a layer of protection where you don’t have to trust if someone will send you the tokens or not, it’s still very much like what is referred to as OTC, or ‘over the counter’. When the Bitswap Decentralized Exchange comes online, (we will let Sigil update everyone on that date, should be within a month from now), Bitswap will work just like Uniswap, allowing anyone to swap Ethereum and wrapped Bitcoin into BitClout as an automatic market maker.
Liquidity pools: Like we pointed out above, liquidity pools are the reason that crypto is never going back to 2017. Not only does this earn amazing passive income for people who stake their liquidity by earning interest on their investment (sometimes as much as 100% or more), but it provides the money under a project to help it succeed and the ability for the automatic market maker to work.
Swap anything: On Ethereum, every ether is an ERC-20 token, so as long as a business has created this token, it can be swapped into any other ERC-20 token. Besides swapping BitClout into Bitcoin or Ethereum, imagine swapping the @craig coin into the @fungibles coin (don’t worry Craig, we think some people will want to sell us for you).
To ensure they stay super focused, they have paused functionality of their V1 Exchange to prioritize working on upgrades to the exchange and a new Decentralized Exchange. At this time they will come back online better and stronger than ever before.
In addition to supporting a decentralized exchange, they have also been building the ability to support a centralized exchange like what Binance or Coinbase is. Here they will be able to support other features like an automated matching engine and an order book model.
So while it’s a bummer we cannot swap, just think of how much this will improve BitClout, the ecosystem, and the types of companies and applications that will be created. Patience friends, patience.
The 3 major features above will make it not only possible for developers to build new products and solutions, but will also make it enticing for devs to develop on top of the BitClout blockchain.
We are working with Bitswap to find projects that would benefit greatly from being able to take advantage of liquidity pools; a good example of this is the @bitborrow project where you will be able to take a loan out against your creator coin or your position in someone else’s without having to sell. It’s very important to understand that without the support of the developer community behind BitClout, or any project for that matter, a new blockchain would not be able to succeed.
Up until recently, BitClout got off to a rough start with the dev community because when it was first developed, a lot of the tech was centralized. With the recent changes and a few more to come, BitClout will be fully decentralized and ready to become a major player, putting this technology into the hands of the people and the developers who will pave a new road for the future of a marketplace that can trade creators, and incentivize businesses to build the next Twitter, Facebook or Coinbase.
Hey Bitswap, Uniswap currently has a $38 billion dollar market cap. Don’t fuck this up.