What is SnowSwap (SNOW) | What is SnowSwap token | What is SNOW token
SnowSwap is a new decentralized exchange for swapping yield bearing stablecoins. Specifically, built for yield bearing Yearn Finance assets. The aim is to eliminate steps from swapping stablecoins, when users want to swap to a different Yearn DeFi Vault. Instead of having to withdraw and deposit assets again, wasting Eth to high transaction fees. SnowSwap lets you trade between Yearn vaults directly, saving users a lot of headache, cost, and time.
What is SnowSwap?
At its core the automated market maker (AMM) is a fork of Curve Finance. It uses Curve’s pooling algorithms but it goes well beyond just being a simple copy and paste fork. SnowSwap is an innovative use case for yield bearing stablecoin assets which aims to solve a real problem.
Despite over 220 million yUSD tokens being minted, there are no liquid markets for the wrapped stablecoins.
- Exiting vaults can be costly with 0.5% withdrawal fees if their token reserve is low, plus the high gas costs.
Pools for yVault stablecoins… By creating liquidity pools for yUSD tokens, SnowSwap solves these problems. The platform is designed to offer low slippage swaps, meaning that when a user does want to exit a vault they could swap into the vault with a large reserve (to avoid paying withdrawal fees).
- You can also earn additional yield from assets by being a liquidity provider. The trading fees are set at 0.04% per swap, which go to the LPs.
SNOW liquidity mining… And as an additional bonus, users will earn SNOW, the governance token for SnowSwap. The team intends to use SNOW to bootstrap the platform’s overall liquidity. With 80% of the token’s total supply being distributed to LPs, this ecosystem looks ripe for yield farmers.
SnowSwap: Switch between Stablecoin Vaults
OVERVIEW OF SNOWSWAP
In brief, SnowSwap is an upcoming way to swap between different stablecoin yEarn Vaults quickly, and for a relatively small fee. They do this by utilizing the proprietary Curve algorithm which allows you to get a cheaper exchange rate. This can enable swapping of vaults to take advantage of better APY rates while saving in gas fees.
REWARDS FOR LIQUIDITY PROVIDERS
It’s already possible to become a liquidity provider. To get the rewards, you simply deposit your stables now and you’ll get rewards once they begin to issue them — and as a bonus, the rewards will be retroactive, so if you deposit now, you’ll be rewarded for prior LP once it kicks off. Later you’ll be able to use the rewards to vote in the DAO etc.
SNOWBALL.MONEY — A MOBILE-FIRST DEFI SERVICE
While also in development, there’s a beta app that we’ve tested and, while not the first way to ever access DeFi via mobile, it looks like a winner, enabling users to deposit straight from banks into DeFi, into yEarn vaults. This is very bullish for yEarn and really for DeFi in general. We’ve seen Robinhood and Acorn succeed as mobile-first platforms, and that’s what snowball.money is aiming to do, but for DeFi. They’re also planning to launch a Debit Card that you’ll be able to recharge from your DeFi accounts and purchase real-world assets.
They’re not only launching in the US (in 32 States/Districts presently) but in many countries around the world. The App is available for download, but it’s still a bit rough, clearly an early release, but we’re excited about what the future holds for the Snow ecosystem.
If you’d like to donate ETH/ERC-20, it’s appreciated! Haines.eth
SnowSwap: Bringing Liquidity to Stablecoin Yield Farming
The launch of Curve.fi’s y pool was a watershed moment for DeFi. It introduced the LP token yCRV, which was the first asset of its kind to enable holders to earn yield from two different sources simultaneously: interest from lending pools, and LP fees from an AMM pool.
yEarn (formerly known as iEarn) pioneered the notion of a “smart” stablecoin which optimized lending pool yield, and Curve extended it to add:
- Basketing for diversifying yield across different stablecoins to avoid needing to swap between coins to optimize interest yield.
- Additional yield in the form of 4 bps per trade.
With the second coming of Andre Cronje, yEarn introduced the concept of Vaults. Designed to combat the high barrier to entry for yield farming (due to gas costs), yEarn’s yVaults allowed users to deposit stablecoins in a pool managed by an on-chain yield farming strategy, effectively allowing gas costs to be subsidized by economies of scale. This led to the creation of the USDC vault, and shortly thereafter the yCRV vault. Today, there is a yVault for every major stablecoin.
These vaults enabled users to participate in yield farming strategies without having to worry about gas costs, and gave rise to yet another source of stablecoin yield. Today, the yVault token yyCRV is one of the highest yielding wrapped stablecoins to-date. Providing its holders with the combination of lending pool interest, AMM LP fees, and yield farming returns. Since yyCRV has become so popular that it has been renamed to yUSD. As of this writing, over 220 million yUSD tokens have been minted, providing an annualized yield of over 84% to depositors.
yVault stablecoins represent the highest passive yield that can be earned on stablecoins today. However, there is no liquid market for the likes of yUSD — even Uniswap only has about $150k of liquidity for yUSD.
Exiting yVault positions can be costly as well. Withdrawing stablecoins from vaults incurs a 0.5% withdrawal fee, and can incur additional fees in the form of high gas costs if the requested funds need to be withdrawn from the strategy contract. These gas costs can sometimes be hundreds of dollars, depending on gas prices.
SnowSwap
SnowSwap is designed for low slippage stablecoin swaps and is based on Curve’s AMM. By creating pools for yVault stablecoins, traders can easily swap between different vaults without paying withdrawal fees and can exit positions cheaply by swapping into vaults with sufficiently large token reserves and then withdrawing. SnowSwap users can also diversify their yield across multiple stablecoin vaults by acting as LPs, and can also earn additional yield in the form of trading fees, which will initially be set at 0.04% per swap.
The first pool will support yVault USDC, DAI, USDT, and TUSD. The second pool will support yUSD and ycrvBUSD. Vanilla stablecoins can be deposited via a zap contract and the corresponding yVault token will automatically be minted and supplied to the pool. Upon successful deposits, LPs will receive the ySNOW token, which will increase in value against the underlying pool tokens as AMM fees accrue to the pool.
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