Launching Soon on Pancake IFO: A Quick Look at the Stablecoin Exchange Protocol Wombat Exchange
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Launching Soon on Pancake IFO: A Quick Look at the Stablecoin Exchange Protocol Wombat Exchange
Wombat Exchange is a stablecoin swapping protocol built on the BNB Chain.
Navigating Web3 tides with focused insights
By Morty
Wombat Exchange is the latest project to launch via PancakeSwap's IFO. This article introduces the Wombat protocol but does not constitute investment advice.
Wombat Exchange is a stablecoin exchange protocol built on BNB Chain.
When discussing stablecoin exchange protocols, Curve Finance and its veToken model immediately come to mind. Curve is an Ethereum-based stablecoin exchange protocol with a current TVL (Total Value Locked) of $5.63 billion, ranking fourth among all decentralized applications and serving as the go-to platform for most on-chain users seeking stablecoin swaps.
In the Wombat whitepaper, the team thoroughly examined shortcomings in algorithms used by protocols such as Curve, UniSwap, and Balancer, aiming to introduce a new algorithm within Wombat’s product design to address these issues:
1. Complex token pair combinations require complex algorithms, which force users to navigate complicated user interfaces. Wombat aims to simplify the UI/UX interface while reducing high gas fees caused by algorithm execution.
2. Another major issue with current AMMs is the need to provide liquidity in pairs. Wombat will allow users to supply liquidity unilaterally.
3. In Curve’s setup, pool size is constrained by the asset with the lowest supply. Depositing USDT and USDC into DAI-USDT or DAI-USDC pools is economically inefficient because DAI’s market cap limits capital efficiency for USDT and USDC (USDT market cap: $67.5B, USDC: $52.2B, DAI: $6.9B). Wombat offers a more scalable solution to overcome this limitation on capital efficiency within multi-asset pools.
User Experience
So how does Wombat perform in real-world use?
Let’s compare its performance against PancakeSwap and iZiSwap for stablecoin exchanges:
Among the three DEXs mentioned above, PancakeSwap has the highest slippage, iZiSwap performs well, and Wombat exhibits the lowest slippage.
Tokenomics
WOM is Wombat’s governance token, with a total supply of 1 billion tokens. It serves three primary purposes:
Governance: WOM holders can participate in protocol governance and vote on proposals.
Liquidity Incentives: Users earn WOM tokens by providing stablecoin liquidity to pools.
Boosting: Users can lock WOM tokens in the Boosting Pool to earn additional WOM rewards. This mechanism resembles Curve’s veToken model but differs in flexibility—users can choose lock-up periods ranging from 7 days to 4 years.
Token distribution is as follows:
PancakeSwap IFO
Wombat will launch its IFO on PancakeSwap on August 30:
IFO Start Time: August 30, 2022, 20:00 (UTC+8)
IFO End Time: August 30, 2022, 22:00 (UTC+8)
IFO Price: 1 WOM = $0.075
A total of 28 million WOM tokens will be distributed during this IFO. 20% will be released immediately, while the remaining 80% will vest linearly over 90 days.
For detailed participation instructions, refer to the official documentation: https://medium.com/wombat-exchange/announcing-wombat-ifo-on-pancakeswap-8af69bec419d
Following the IFO, Wombat will begin a stablecoin deposit campaign on September 5, allowing liquidity providers to deposit USDT, USDC, DAI, and BUSD to earn WOM token rewards.
Additional Key Information
Investment Backers
Wombat completed two funding rounds this year. In March, it raised $5.25 million in a Series A round at a $70 million post-money valuation, led by Animoca Brands and Hailstone Ventures. In April, it secured another round with undisclosed terms, led by Shima Capital and joined by Jump Crypto and Wormhole.
Animoca Brands is the parent company of The Sandbox and has over 340 portfolio investments, including Colossal, Axie Infinity, OpenSea, Dapper Labs (NBA Top Shot), Yield Guild Games, Harmony, Alien Worlds, and Star Atlas.
Shima Capital is a recently active VC firm investing broadly across sectors such as analytics platforms, carbon neutrality, DAOs, consumer economy, DeFi, gaming, infrastructure, metaverse, and NFTs. Notable projects in its portfolio include Polkadot, BOBA, Zebec, and 1inch.
Notably, Wombat maintains close ties with Binance Labs. In an interview with BNB Chain, the Wombat team revealed that they were incubated by Binance Labs and personally advised by CZ, who stated that Wombat fills a clear gap in Binance’s ecosystem.
Code Audits
Wombat has passed code audits conducted by Peckshield, Hachen, and Zokyo. Additionally, Wombat has partnered with Immunefi, a Web3 bug bounty platform.
Roadmap
Wombat Exchange aims to become the largest stablecoin exchange protocol on BNB Chain within three months. Currently, Wombat has a TVL of $18 million, ranking 30th among decentralized applications on BNB Chain.
The roadmap includes expanding to additional public blockchains in Q4 of this year and supporting bridged stablecoins. As an investor in Wombat, Wormhole may also provide support for Wombat’s multi-chain expansion.
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