What is AirSwap?
AirSwap is a decentralized peer-to-peer (p2p) cryptocurrency exchange built on the Ethereum blockchain. The exchange aims to solve the problems associated with the order book model of transactions. How does AirSwap work to solve this problem? AirSwap takes a different approach than other decentralized exchanges. Instead of pooling funds on the exchange and allowing buyers to trade tokens in the exchange, AirSwap helps people who want to sell tokens find buyers for their tokens.
Using AirSwap, people who want to sell a token broadcast their intention to sell to the network and the price at which they want to sell. Buyers can sift through the offers from the sellers and select the ones they'd like to purchase. When the buyer chooses to buy, a smart contract is executed which sends his payment to the seller and sends the seller's tokens to the buyer.
To protect both parties involved in the transaction, AirSwap uses a technology known as an atomic swap. Atomic Swaps ensure that the transaction either goes through and that the tokens are exchanged or that the tokens are returned to their owner in the case of a transaction failure. AST is AirSwap's native token and it is used to create transactions. AirSwap was launched in 2017 and has offices in New York and Hong Kong.
What Is AirSwap: Quick Facts
- AirSwap is a decentralized exchange (DEX) that facilitates peer-to-peer token swaps.
- Unlike most other decentralized exchanges, AirSwap allows people to trade cryptocurrencies with other people as it is a peer-to-peer exchange.
- AirSwap has facilitated nearly $2 billion dollar worth of trades since its inception and has paid out nearly $2 million worth of rewards to its users.
- The native AST token is used to put up tokens for sale and vote on proposals concerning improvements to the exchange.
How AirSwap Works
So how does AirSwap work to provide a decentralized peer-to-peer exchange? It runs on the Ethereum blockchain and enables the exchange of tokens built with Ethereum's ERC-20 token standard between individuals using smart contracts.
Unlike most other decentralized exchanges, AirSwap is a peer-to-peer platform that connects people who want to trade through smart contracts known as atomic swaps. The smart contracts execute automatically when a buyer decides to buy from a seller and exchange the tokens between both parties automatically.
Market makers are people who want to sell tokens on the AirSwap platform. In order to trade, they have to own some AST tokens, which are the native tokens of the AirSwap platform. So what is AST used for, and how? To broadcast an "intent to trade," sellers need to lock up 250 AST in a smart contract on the AirSwap marketplace. The intent to trade is then broadcast to all potential buyers on the platform. The locked-up amount is held for a period of seven days. If a trade is executed before seven days, the locked AST tokens are unlocked and returned to the owner. However, if a trade is carried out before seven days, the AST tokens are returned to the owner after the trade is made.
Market takers are people who want to buy tokens on the AirSwap platform. Unlike market makers, market takers do not need to own any AST tokens to use the platform. When a market maker broadcasts an intent to trade, the market takers can check the platform for all the intent to trade broadcasts. After sifting through the broadcasts and deciding on the one they believe offers them the most favorable price, they execute that order, and the smart contract swaps tokens between both parties.
Where Is AST Used?
What Is AST, and Why Is It So Crucial to the AirSwap Exchange?
The AST token is the native token of the AirSwap platform. It is an important token for users of the AirSwap exchange and members of the AirSwap community. AST is primarily used for the governance of the AirSwap exchange by voting on proposed changes to the platform and selling tokens on AirSwap by broadcasting an intent to trade.
Market Making
AST token holders are the only people who can make markets on the AirSwap exchange. This is due to the fact that 250 AST needs to be locked up to create and broadcast an intent to trade on the AirSwap exchange. This is an incentive for people who want to sell their tokens on AirSwap to hold their AST tokens instead of selling them.
Governance
As a decentralized organization, control of the AirSwap platform is largely in the hands of the AirSwap community, who are members of the AirSwap decentralized autonomous organization (DAO). So what is AST used for in governance? Holders of the AST token are eligible to participate in voting on proposals known as AirSwap Improvement Proposals (AIP) about AST and changes to the Anyswap platform. In particular, AST token holders are responsible for setting the amount of AST needed to create an intent to trade broadcast on the AirSwap exchange.
AirSwap History & Founders
AirSwap was founded by Michael Oved, Sam Tabar, and Don Mosites in 2017 as a joint venture between the blockchain software company ConsenSys and Fluidity, AirSwap's parent company. Fluidity was also founded by AirSwap's founders, and ConsenSys would go on to acquire Fluidity in 2020.
The whitepaper for the project was published in May 2017 alongside the launch of the protocol. The white paper outlined the development of a decentralized exchange built on what was then referred to as a swap protocol. The swap protocol would enable peer-to-peer trading by making use of smart contracts on the Ethereum blockchain.
At the launch of the project, the AST token was released to the public through an Initial Coin Offering (ICO) on October 10, 2017, along with details about the AST sale and how it would occur. At the ICO, 150 million AST tokens (30% of the total maximum supply of AST tokens) were made available to the public for sale. 1 AST token cost 0.001ETH. AirSwap raised a total of $36 million from the ICO for the launch and development of the AirSwap exchange.
AST Tokenomics
AST has a maximum supply of 500 million tokens. 150 million AST tokens are currently in circulation, according to CoinMarketCap, representing 30% of the maximum supply, and that leaves 350 million tokens that are yet to enter circulation. The remaining 70% of the tokens are allocated to advisors, partners, founders, partnerships, and future token sales.
- 10% is allocated to the founders of AirSwap.
- 10% is allocated to partners and advisors of AirSwap.
- 10% is allocated for partnerships with other projects and organizations.
- 40% is allocated to be locked up for a period of time to be determined by the AirSwap team.
Because AirSwap does not function like other decentralized exchanges, there are always questions about AST token value. The value of the AST token lies largely in its use to create an intent to trade broadcast on the AirSwap exchange. Anyone who wants to make use of all the benefits of the decentralized peer-to-peer exchange to sell their tokens needs AST to do so, and that makes it valuable.
How Is AST Created?
At the launch of the AirSwap exchange, 500 million AST tokens were created. As per AirSwap's official announcement, only 500 million AST tokens will ever exist, and those are the ones created at its launch. New AST tokens cannot be created or mined in any way.
AirSwap's Competitors
AirSwap is a unique decentralized exchange, especially among the decentralized exchanges on Ethereum, where it is deployed. One way to see this is to look at the total value locked (TVL) figure. TVL is the number of funds locked in a decentralized exchange at any point in time. For example, Curve Finance, the largest decentralized exchange in the world, has a TVL of $6.61 billion at the time of writing.
AirSwap, by comparison, has a total TVL of $0. This is because AirSwap functions in a totally different way from other decentralized exchanges. Other decentralized exchanges typically pool funds into smart contracts (known as liquidity pools) on the exchange and then allow people to swap tokens between themselves and the funds in the pools on the exchange. AirSwap does not need to store any funds because it is basically acting as a middleman and not a trader like other decentralized exchanges.
This approach makes AirSwap a safer exchange to use than other decentralized exchanges. It is not uncommon to hear of decentralized exchanges being exploited by hackers and the funds belonging to the exchange's users being made away with. AirSwap does not store any funds on its exchange, so such exploits are impossible.
AirSwap Partnerships & Investors
AirSwap was launched by and is overseen by blockchain technology company Fluidity in partnership with ConsenSys. In order to fund the project, AirSwap had an initial coin offering for its AST token, raising $36 million in the process. The project also received funding for development from investors such as Astronaut Capital and HASHED.
Other than its parent company's partnership with Consensys, AirSwap has entered into partnerships with other organizations in its bid to expand. A few months after launching, AirSwap partnered with MakerDAO to bring the popular DAI stablecoin to the AirSwap exchange. Other partnerships include one with Meridio, which enables Meridio's asset-backed tokens to be traded on AirSwap.
AirSwap SWOT Analysis
AirSwap's Strengths
AirSwap's biggest strength lies in the unique properties of the technology it uses to facilitate trade between people. The atomic swap technology makes token swapping on AirSwap safe and direct, and if for any reason the transaction does not go through, your funds are immediately returned to you. And since AirSwap does not have custody of any assets, any exploits of the exchange cannot result in the theft of customer funds.
AirSwap's Weaknesses
Unlike other decentralized exchanges, AirSwap doesn't offer instant swaps of tokens. On other decentralized exchanges, when you want to swap tokens, you swap against a pool of tokens on the exchange, so the transaction is instant. However, on AirSwap, you broadcast your intent to trade and then wait, hoping a buyer decides to take your offer and execute your trade. The lack of certainty and instant settlement for sellers is one of AirSwap's biggest weaknesses.
AirSwap's Opportunities
Ethereum's highly anticipated "Merge" event is coming up soon. The Merge will see Ethereum transition from a proof-of-work (PoW) to a proof-of-stake (PoS) blockchain. Among many other benefits, the merge is expected to reduce the cost of transactions, and the time it takes for transactions to be completed on Ethereum. It will also reduce transaction wait times by increasing the volume of transactions that Ethereum can process per time interval. The improvements to Ethereum will make AirSwap easier and more attractive to use.
So far, AirSwap has launched only on the Ethereum blockchain and enables the trading of only tokens built on Ethereum's ERC-20 standard. Most decentralized exchanges have realized that they can easily increase their market share by expanding to other blockchains and providing their services there. Expansion to other blockchains also provides an opportunity for AirSwap to gain more market share.
AirSwap's Threats
Competition in the decentralized exchange space is heating up, especially on Ethereum, ahead of the Merge event. The more prominent players in the decentralized exchange space are expanding their services and offerings to capture as large a segment of the market as possible. AirSwap's services and products will need to be constantly improved to avoid being squashed to death in this war.
AirSwap Roadmap
AirSwap's focus for the near future is on expanding its user base by deploying the exchange on new blockchains and enabling different kinds of blockchain-based organizations to use its platform. So far, the AirSwap DAO has voted on and passed three AirSwap Improvement Proposals (AIPs) to deploy the AirSwap exchange on three new blockchains. In the coming months, AirSwap will be deployed on the Moonbeam, Arbitrum, and RSK blockchains.
The team and community are also looking to enable other crypto niches to use the AirSwap exchange for their needs. DAOs and NFT communities and marketplaces, in particular, are in view of the AirSwap exchange. Plans are underway to make it easy for NFT marketplaces and DAOs to integrate easily with the AirSwap exchange to facilitate the swap of NFTS and DAO tokens.
AirSwap Community Updates, News & Highlights
NFT Marketplace
The AIP 54 proposal that AirSwap create a reference NFT marketplace for NFT communities has passed. The proposal passed with 99.04% of all votes cast in its favor. AirSwap will now embark on creating a decentralized NFT marketplace that other NFT communities can use as a reference when creating their own NFT marketplace.
Social Media Awareness Program
The AIP 63 proposal was recently passed after voting by members of the AirSwap DAO. The proposal is for the creation of a social media community ambassador program. Participants of the program will receive rewards in AST tokens for creating social media posts like Twitter threads and YouTube videos about AirSwap and the AST token. The program will last for a trial run of one month, and if it is deemed successful by the community, it will be renewed and continued.
Call For Contributors
AirSwap recently announced a call for contributors to join its DAO and contribute to any of the DAO's ongoing projects. The call is for developers, designers, marketers, writers, and other skill sets to join these projects. Contributors earn rewards from the DAO in the form of a monthly shared rewards pool. The rewards are distributed according to the relative impact each contributor has made on the project, as judged by other contributors.
Why AirSwap Is The Best Decentralized Exchange
As a decentralized peer-to-peer exchange, AirSwap is designed to solve some of the biggest problems plaguing decentralized exchanges. Decentralized exchanges are considered better than centralized exchanges because they enable people to carry out transactions without entrusting their funds to any organization. However, decentralized exchanges also have problems that draw them back, and those problems include privacy concerns, front-running, slippage, and more.
Privacy is an issue for decentralized exchanges because they are built on blockchain technology, and the blockchain prioritizes transparency. So the history of all transactions carried out on a decentralized exchange is publicly visible to anyone on the internet. To solve this problem, AirSwap enables negotiations for a transaction to be carried out privately, off-chain between the buyer and the seller. So that at the end of the day, only both of them know the full details of the transaction.
The second problem is front-running. Front-running is a practice through which malicious people try to influence the price of a token in their favor by using inside information about the token. Although front-running is illegal, it is difficult to catch the actors because of the anonymous nature of blockchain transactions. AirSwap makes front-running impossible because trades are carried out directly between wallets all at once. Therefore, information about trades is not publicly visible in time for a front-runner to use the data to manipulate the market.
Slippage is a problem that arises due to the time between the initiation of a transaction and the execution of that transaction on a decentralized exchange. Because the prices of tokens are always changing, an order placed for a token at a particular time can be executed at a lower price. For example, you can try to buy $25 of Ether (ETH) on a decentralized exchange when the price of 1 ETH is $1, but due to the high volume of transactions the exchange is processing, your order gets executed five minutes later when 1 ETH is worth $5. You still get $25 worth of ETH, but instead of 25 ETH, you receive only 5 ETH. On AirSwap, there are no slippages because transactions are done peer-to-peer. The quoted price of a token by a seller is the only price at which they can sell it, so there is no slippage problem.
And finally, there are no trading fees on AirSwap. Other decentralized exchanges typically charge a trading fee for buying tokens on the exchange. The only costs for using AirSwap are the gas fees paid for transactions on the Ethereum blockchain.
Where To Buy AST Tokens
You can purchase AST tokens on any exchange that supports AST tokens. It is particularly easy to buy from an exchange like OKX. OKX allows you to buy AST using popular payment methods such as a credit or debit card and lets you settle purchases in your local currency.
OKX also allows you to trade other cryptocurrencies you own for AST. Information about AST, how to purchase it, and the things you can do with it can be found on OKX too.
How To Store AST
There are three major ways to store your AST tokens. You can store them on a centralized exchange like OKX, in an Ethereum software wallet like Metamask, or in a hardware wallet like Ledger.
On an Exchange
Once you create an account with OKX, a wallet is created for you. Any AST tokens you buy via OKX will be deposited in this wallet. You can also send AST from outside OKX into it. This wallet is very convenient to use, as it can hold multiple assets and easily be recovered when lost.
In a Software Wallet
You can also choose to store your AST tokens in any software wallet supported by the Ethereum blockchain, like Metamask or Rainbow. About AST storage in software wallets, note that you are entirely responsible for the safety of your assets and may find it difficult to recover lost assets.
In a Hardware Wallet
You can also choose to store your AST tokens in a hardware wallet like Ledger or Trezor. Hardware wallets are physical devices in which you can store cryptocurrency. Hardware wallets, though reputed to be the safest, can be quite expensive and technical to set up.
FAQs
What Blockchain Is AirSwap Built on?
AirSwap is built on the Ethereum blockchain and supports the swapping of Ethereum tokens. The exchange has plans to expand to other blockchains in the future.
Can I Mine AST?
No, you can't. There is no mining program for the AST token. All the AST tokens that will ever exist were created at the launch of the AirSwap exchange, and no new AST tokens can be created.
What Is AST Used?
AST is used to signal to other AirSwap users that you want to sell some tokens. AST is also used to vote on proposed changes to the AirSwap platform.
Can I Buy AST With My Local Currency?
Yes. You can buy AST tokens directly with a credit or debit card in your local currency on exchanges that support them, like OKX.
Can I Swap Other Tokens for AST?
Yes, you can. If you want to swap or trade other tokens for AST instead of buying it with fiat, you can do that on any centralized or decentralized exchange that supports swapping or trading another cryptocurrency for AST, such as OKX.
