Dear Earth Citizen, welcome to this weekly technical review!
A fresh beginning
Launched in Q4 of 2020, Sifchain is a fresh face in the quest to inter-connect blockchains. While still early in development, Sifchain has incredibly ambitious plans to solve the long-standing problem of the lack of interoperability between decentralised exchanges (DEXs).
Sifchain is the world’s first Omni-chain decentralised exchange (DEX) built with the Cosmos SDK. While Sifchain currently connects both the Cosmos and Ethereum ecosystems, this is merely a stepping stone as they look to incorporate up to 25 blockchains for cross-chain integration.
At this time, users within Sifchain can import and export tokens from Cosmos-based projects such as ATOM, JUNO, IXO, AKT and OSMO while also importing and exporting tokens from Ethereum-based tokens such as ETH, USDT, USDC and many more. Within the Sifchain DEX, all of these tokens can be easily swapped for one another at extremely low fees and fast speeds.
However, Sifchain has much more planned than this initial offering. Let’s look at the company, the technology platform, and why you should keep an eye on them in the future.
What makes Sifchain different?
The Sifchain DEX is a low-slippage Omni-chain solution with more substantial LP rewards than other competitive exchanges. Users have their choice in adding to any of the 90+ liquidity pools currently listed on the DEX and earn at least 100% APR in doing so.
The Sifchain platform has extensive cross-compatibility with other DEXs and centralised exchanges, allowing for liquidity across numerous chains – this will ensure users don’t have to pay hefty fees or partake in complex trading structures.
Their exchange runs on the Cosmos SDK, making it compatible with other Cosmos Network blockchains such as Juno, ixo, Akash and Terra.
They are currently the only Cosmos-based DEX where users can quickly swap Cosmos assets for ERC-20 tokens at a low cost.
Running on the Cosmos SDK makes Sifchain 100 times more efficient than Ethereum-based DEXs, which provides users a great user experience, with almost no delays when executing swaps.
Why choose Sifchain for LP-ing?
Sifchain has been very busy as of late. They recently launched the Sif Expansion program to reward liquidity providers. All pools within the DEX will earn a minimum of 100% APR, with some pools earning a minimum of 300% APR.
This is how it works:
- As more liquidity is added, this does not negatively impact the APR. The APR percentages are a guaranteed minimum and stable, which means that as more people join the pool, everyone continued to earn these lucrative rewards.
- Sifchain offers Impermanent Loss Mitigation. The greatest concern of Liquidity Providers is that they will incur losses in the value of their assets in a Liquidity Pool when the ratio of assets changes, relative to keeping the full value of their primary asset outside the liquidity pool. Now Sifchain protects against this phenomenon. For example a deposit of 100k worth of assets into a Sifchain liquidity pool may drop to 80K in value due to the price of one asset in the pair decreasing. When the Liquidity Provider removes all 80K worth of their assets. they continue to earn LP rewards on the 20K Impermanent Loss (the ‘IL amount’).
The reasoning behind this program is to accumulate deep liquidity into the Sifchain DEX while the team works on delivering their core features of Omni-EVM and Margin Trading.
Furthermore, they also offer profound rewards from staking and delegating. This ensures the system stays in balance between liquidity providers and stakers/delegators.
Why Keep an Eye on Sifchain in the Future?
Everything that Sifchain is currently focused on is setting them up for their future endeavours to make them one of the world’s leading exchanges.
They have started their DAO formation process by introducing several DAO councils. These councils are responsible for determining the strategy and procedures for new token listings and for determining how delegation amounts to node validators are determined. They plan to spin up additional councils soon, the next being focused on marketing.
While Sif’s Expansion is earning their liquidity providers lucrative rewards now, they are aiming at implementing more novel and sustainable DeFi 2.0-centric programs to ensure LPers and stakers/delegators are being incentivised appropriately for their participation in the protocol.
They are also launching their coveted Omni-EVM feature, which will allow them to spin up new connections to other EVM chains in a matter of weeks, or potentially even days. This means that we will live in a world where Sifchain will be connected to 25+ leading blockchains, including Binance, Solana, Avalanche, Cardano, Moon Beam, Moon River, and more. This will allow users to essentially move any token from any blockchain into Sifchain, swap for any other token from any other blockchain for minuscule costs, and export those tokens out to any blockchain the user desires. Simply put: true and cheap interoperability.
What is new for April?
The Sifnode team has implemented the functional code for PMTP in Sifnode’s swap logic and added tests to the code. It is currently adding additional tests and standing PMTP up in an internal testnet (referred to internally as “tempnets’). The Front-end team is updating the DEX User Interface to receive PMTP data and the Data Services team will soon update Sifchain’s data pipelines to support PMTP data.
The team maintains that it’s on pace for PMTP to launch during the first week of April.
The crypto-economics team is also working on compiling key metrics that SifDAO can use to track the success of policies and the overall health of the platform. Some of these stats can already be found on services such as CoinGecko, the DEX UI, Sifchain’s data API, or Sifchain’s beta data dashboard. However, the team are working on providing additional metrics such as:
- The relative amount of $ROWAN on Sifchain and other exchanges.
- Size of interexchange arbitrage for $ROWAN.
- $ROWAN volatility.
- $ROWAN trading volume.
- The total value of all non-$ROWAN on Sifchain.
- Pending unbonded liquidity on Sifchain.
- $ROWAN rewards distribution concerning PMTP.
Sections adapted from the Medium article on Sifchain's Weekly Updates.
$ROWAN Technical Review:
All prices shown are as of 07/04/2021 at 22:00 UTC+2
From a long-term point of view, prices are definitely at their lowest point.
We could call it an accumulation phase when smart money begins to enter the game. Or maybe the time prices can go further down. If only we could see the future, it’d be nice!
Anyway, for a bullish signal, the first target to break is USD $0.20. Prices were rejected several times, and it remains the most substantial area to break.
Note that this level can be reached once PMTP and other tools are on-chain and fully operational.
Also, the USD $0.08 is the lowest point, so the strongest support in case of solid retracement. To be clear, this kind of retracement could occur only if the whole market retraces.
Let’s zoom into a shorter timeframe and see how it goes.
Daily chart: Are prices ready to take off?
After several days of range, we can see a move and prices are decidedly edging higher.
The retest of the last higher high, at USD $0.103, could be a good argument for going higher and going back to USD $0.11 and USD $0.15 next.
This momentum will depend on the evolution and how the market will accept this news.
Also, the chart above tells us the different supports/resistances for the coming days/weeks. Always good to have this kind of overview if you want to invest and add liquidity to these Pools.
In Summary
Sifchain is positioning itself as everyone’s one-stop shop when it comes to swapping, providing liquidity and staking and delegating.
By connecting both Cosmos and Ethereum ecosystems, Sifchain is becoming an essential DEX for this type of economy. The proposed evolutions will be strong in price impact and liquidity for the different exchanges.
Also, the economic program proposed by the developers and the strong support of the community is two fundamental points for the future of this project which will remain brilliant and strong in the long term.
Liquidity is the critical enabler for healthy financial markets, and this holds true for ReFi markets. Sifchain is leading the way connecting token economies across the entire blockchain ecosystem, to provide much more accessible, faster and cheaper decentralised token exchanges.
Until next week, stay safe on the markets!
Romain