GigaSwaps

GigaSwaps > Swaps.

tl;dr - GigaSwaps are swaps where users may receive additional random rewards real time.

Decentralized infrastructure is funded by fees (caveat ofc also funded by VC investment). Computer operators provide validation via POW/POS for a portion of those fees. If there are no fees, the network operators will stop contributing given they are burdened with costs. This is a threat to the networks' security, resulting in inevitable hack or network failure. Decentralized apps largely function the same way with the exception being operators provide liquidity rather than validation.

Case and point - you need USAGE of the applications and network for its sustainability.

When deep diving into decentralized exchanges (DEX) and the methods that drive sustainability, we look back and see the hundreds of DEXs that shut down vs the ones that are still thriving today -- analyzing what strategies contributed to that sustainability.

Key Strategies Observed:

• Trade Mining
  (note: MEV, bots and whales make up 94% of dollar volume across all DEX)
  
• Payment for Order Flow (PFOF)
  (note: PFOF via RFQ is a compelling fee source to fuel incentives)
  
• Liquidity Mining / Farming

Of these strategies the more retail facing is trade mining. Trade mining is the process of rewarding traders directly for contributing to volume.

Trade Mining is successful if the following exists:

• Loyal Users - users who continue to use the product after the incentives are removed / unavailable.
  
• Sybil Protection - systems to make it costly to exploit via fake users disincentivizing manipulation, ultimately benefiting the organic users more.

Iterating from Trade Mining towards GigaSwaps:

GigaSwaps are a novel concept we created — a flywheel effect starting at the PFOF fees generated from trade mining used towards a preps-like funding rate for incentives, proportionally rewarding swaps (usd value), via a verifiably random weighting mechanism.

In the first iteration, we found that very targeted windowed incentives was key to produce memetic outcomes which communities rallied around. This led to a spike in viral coefficient, creating more usage from more new users. The flexibility to then target newly trending markets, directing incentives proved effective at creating volume and economic upside for traders benefiting from price movement. (example: a reward multiplier leading to trader accumulation on $26 SOL at that time).

In the second iteration, enabled by the low distribution costs and order flow fees of Solana, the Real-Time Rewards was and continues to be incredible at informing the road from swap rewards to GigaSwaps. The speed at which we could implement improvements has been incredible. The Real-Time rewards allowed us to:

• Create a better system for addressing sybil
• Reward micro transactions (shrimp)
• Unlock ways to push external revenue sources into funding rate
• Address weighting
• Disqualify toxic flow volume
• Deliver positive PnL reward value
• Route reward oracle via USDC rather than token to improve economic value (funding-rate-like)
• Reward users who continue to participate towards becoming loyal users

To inform this process we've logged over 2.5 million qualifying Real-Time Swap Reward swap transactions:

With new modifications, I find it will be exciting to see:

• Resurfaced targeted windows to improve memetic rally mechanics.
• Windowed LP fees fed back from targeted windows.
• Impact of community highlighted token launches from our launchpad feeding additional rewards
• Taking advantage of the post ducan-upgrade low Ethereum fees, unchaining rewards to batch distribute them via block engine real time.
• Cross network impact to loyalty

More Swaps. More Drops.