Alien DEX Is Live On Tezos Mainnet

by | Oct 27, 2021 | Adoption, DeFi, Latest

Alien DEX is a new Decentralized Exchange (DEX) to launch on Tezos. We now have Quipuswap, PlentySwap, Vortex, SpicySwap, and now Alien DEX. Flame DEX from Flame DeFi is also on the way soon. Alien DEX is built by DegenTech, who also built The Magic Button and DeFi yield farming platform Alien’s Farm.

Disclaimer: DeFi is high risk and the following article contains no financial advice. It is recommended that thorough research is undertaken on any DeFi/blockchain applications, utilizing multiple sources, before participating with any blockchain projects, or tokens in this space. Read our full disclaimer here.

Alien DEX Is Live On Tezos Mainnet

Alien DEX is a new Decentralized Exchange (DEX) to launch on Tezos. We now have Quipuswap, PlentySwap, Vortex, Spicyswap, and now Alien DEX. Flame DEX from Flame DeFi is also on the way soon.

Alien DEX is built by DegenTech, who also built The Magic Button and DeFi yield farming platform Alien’s Farm

Alien DEX is only a token-to-token DEX. It means that you can trade Tezos-based tokens, but not XTZ. They will add XTZ support in future updates. 

On Alien DEX you can:

– Create any token-to-token pool without limitations. Our AMM supports FA1.2-FA2 tokens.

– Earn trading fees as a liquidity provider. 0.25% trading fee from each trading operation in the pool is distributed among all liquidity providers.

– Earn combo rewards by staking PAULs for chosen pools in the Mining section. It is great news for PAUL holders; from now you may earn combo rewards by staking tokens in the relevant pool and earn a 0.05% fee from each trading operation. The rewards will be collected in tokens that are added to the pool.

The math is simple: the more intensive trade in the pool and more PAULs you stake, the more trading fees you will get.

– Earn 0.05% trading fee as a developer. Any developer may work with our smart contracts and earn a 0.05% referral fee from each trading operation that was conducted via their interfaces.

“We expect that this feature will help developers earn more by integrating our products into their solutions.”

– Farm Referral program. You’ll earn 1% of the staking rewards in the Farm section from each person who followed your referral link.

– Enter new AMM farms with high reward coefficients.

All token pairs can be added by anyone, but a selection of tokens will be whitelisted to ensure the authenticity of the tokens. If you interact with tokens that are not whitelisted, double-check the token address to make sure you are trading with a legit token.

Trading Fees And Distribution

Trading Fees on Alien DEX are 0.45% on your trade. 

These fees are distributed as following:

– 0.25% to LP token holders;

This percentage of the fees will be distributed to all users that have added liquidity to the trading pair.

– 0.05% Degen Dev fund;

This percentage of the fees will be added to the Dev fund to fund further development of the platform.

– 0.05% PAUL buyback and burn;

This percentage of the fees will be used to buy PAUL tokens which will be burned. The goal is to create a negative PAUL supply curve and increase its value. PAUL token supply is infinite though, so scarcity depends on trading volumes. 

– 0.05% to Stake pool;

Users can add PAUL tokens to Mining pools, where they can stake PAULs and earn rewards. Currently, PAUL tokens can be used in this staking feature. Long term, PAUL tokens are intended to function as governance tokens. But at this point, there is no target date as to when that might happen.

– 0.05% Dev Referral fee;

Any developer can use the AMM open-source code and use Alien DEX on another website or in a smart contract. Devs will earn a Dev Referral fee for doing so. This way an incentive is created for Devs to use Alien DEX in other ways and broaden its use-case and thus its trading volume. 

WTZ And cTEZ

Because Alien DEX is a token-to-token DEX and doesn’t support XTZ at this point, all XTZ value trades can be made with an XTZ placeholder.

Similarly to SpicySwap, you’ll be able to use WTZ for this purpose (or the recently launched cTEZ). WTZ is the wrapped XTZ token that allows you to trade XTZ values on a token-to-token DEX. You can get WTZ on Crunchy network.

Crunchy is the best place to get WTZ, since the ratio there is always ~1:1. On Crunchy, you don’t buy WTZ, but you wrap XTZ for WTZ. Anyone can unwrap WTZ. (Burn WTZ and get XTZ in return. )

You can also buy WTZ on a DEX, but be aware of the possible value difference with XTZ and check if the ratio is 1:1 or better. WTZ is a new wrapped concept and prices have not stabilized yet.

If you buy WTZ with XTZ on a DEX now, you’ll currently get a ratio that is under 1:1. Same caution for when you sell your WTZ. It’s best to use Crunchy to convert WTZ back to XTZ (always ~1:1).

Long term there are other factors that need more explanation, but that will be done in a separate article on WTZ and cTEZ.

 That being said, as long as you get your WTZ on Crunchy and use WTZ in a WTZ environment like SpicySwap and don’t sell your WTZ on a DEX for XTZ, the value of WTZ in SpicySwap trading pairs lines up quite nicely with the value of XTZ in Quipuswap and Vortex trading pairs.

That sounds counterintuitive but since SpicySwap only handles WTZ it does fulfill the role of XTZ base value within the SpicySwap ecosystem. The same could be expected on Alien DEX.

If this doesn’t make sense to you, just let the numbers speak and compare for example XTZ – hDAO on Quipuswap and Vortex, with WTZ – hDAO on SpicySwap and Alien DEX.

cTEZ is slightly different in design but serves the same purpose. The goal is a 1:1 ratio, but also cTEZ is new on the market and the value can fluctuate. cTEZ is not wrapped XTZ, but a collateralized token that is pegged to XTZ values. You can mint it similarly to Youves’ uUSD by providing collateral in XTZ. 

In contrast to WTZ, only people that minted cTEZ can burn cTEZ and get XTZ in return by burning cTEZ. 

Arbitrage

More DEXes mean more arbitrage opportunities. This means that you can seek profit in price fluctuations between exchanges.

If the value of a specific token is lower on one exchange, you can buy this token and sell it on an exchange where the value is higher. Make sure to check the actual current values before you buy.

In reality, this is mostly a game for arbitrage bots.

Be Aware Of Liquidity Levels

When a DEX has just launched, liquidity levels can be low. This can cause you to make unprofitable swaps. Make sure you check the liquidity for the token pair that you try to swap and adjust your trading amount to the level of liquidity that is provided.

Low liquidity (where not a lot of tokens are added to the liquidity pool), will decrease your swap ratio. The easiest and safest way to check this is by comparing the trading ratio for small amounts (for example 1 token) to larger amounts (for example 100 or 1000 tokens).

If you would want to trade Paul for hDAO, you type “1” in the Paul input field. In this case, you get for example 0.0386 hDAO tokens in return if you would make the swap.

Now, instead of making the swap, add three zeros. You see the output number change. If the ratio doesn’t change much you’ll see that for 1000 Paul, you’ll get about 38.6 hDAO tokens.

Liquidity is good in this case and you can swap 1000 Paul for hDAO safely. But if liquidity is low, you’ll see that the ratio changes. It could be possible that if liquidity is low, you’ll only get 28.1 hDAO in return.

In this case, you shouldn’t buy large numbers in this trading pair until more liquidity is added. 

Early Adopters

DegenTech has mentioned that they intend to develop a reward program for early adopters and liquidity providers of our DEX.

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