AirSwap - new products, backstory and challenges
Maxime Bucaille, from AirSwap team, talks about exploring new ways to bring legacy financial structures onto the blockchain.
Hello! What’s your background, and what are you working on?
My name is Maxime Bucaille, and I lead AirSwap ‘s business development efforts revolving around trading; this involves improving upon the maker experience, token-based projects, and product integrations. Before joining AirSwap, I was a foreign exchange trader at BNP Paribas. At BNP Paribas (early 2017), I began learning more and more about Bitcoin and then eventually other cryptocurrencies and blockchain solutions. As a trader, market volatility was appealing, but I knew I had to learn more about the underlying technology. Like many professionals in the blockchain space, I soon fell into the blockchain rabbit-hole and sought an opportunity at AirSwap.
AirSwap is a decentralized, peer-to-peer token trading network powered by Ethereum. Traders can buy and sell Ethereum tokens instantly or over-the-counter easily, securely, and without any trading fees. Our mission is to empower people through global, frictionless trade.
What’s AirSwap’s backstory?
In May 2017, AirSwap began as a joint venture between ConsenSys and Fluidity, co-founded by Michael Oved and Don Mosites. The founding of AirSwap was marked by the release of the Swap Protocol whitepaper, a peer-to-peer protocol for trading Ethereum tokens.
During this time, the founders considered how best to architect a decentralized exchange (DEX) that will enable quick, secure transfers of ETH and ERC20 tokens. Combining the backgrounds of the co-founders, AirSwap put a special focus on creating a decentralized trading solution that offered a simple, user-friendly experience.
AirSwap is built off of a hybrid-model where peer discovery occurs off-chain on an Indexer, while settlement occurs on-chain on Ethereum. Unlike your typical exchange, there are no fees or order books on AirSwap.
What went into building the AirSwap?
In May 2017, the Swap Protocol whitepaper was released to the world. During this time, many teams researched and launched solutions for decentralized exchanges. Some emulated legacy systems like order book-based exchanges, while others proposed hybrid or completely new designs. AirSwap focused on a decentralized, peer-to-peer implementation prioritizing scalability and security while providing a simple and easy user experience.
Security has always been a top priority for AirSwap. We made sure to do a third-party audit of the smart contract by two independent security researchers. Internally, we developed strong skills and standards to enforce this. AirSwap never holds or custodies traders’ funds.
The landscape has changed tremendously with different hypotheses from 2017 being tested and new ones being created. The notion of utility tokens has slowed, while tokenization of real-world assets has become more popular, starting with stablecoins. At the time of launch, AirSwap didn’t have any USD-pegged cryptocurrencies on its platform. Now, stablecoins represent over 80% of AirSwap’s overall volume.
AirSwap Instant 2.0 and DexIndex serve as proof points for our belief that simplicity will lead to network growth The Swap Protocol served as the foundational layer enabling the building of decentralized applications. Now, we feel as though we’re fully equipped to grow rapidly and efficiently.
Onboarding new users remains one of our biggest challenges. It is as important as it was in 2017. The revamp of both Instant and OTC, as well as our developer tooling, aims to reduce the different points of friction and simplify our onboarding experience. Recently, we also rolled out a brand new product AirSwap Trader: the first shareable, trustless escrow for Ethereum tokens. We’ve received a ton of great feedback thus far and are looking forward to seeing how the wider-community incorporates the tool within their OTC workflow.
What’s your business model?
AirSwap’s mission is to empower people through global, frictionless trade. Minimizing friction is at the core of the project’s ethos. Using extensive research, we’ve abstracted blockchain technology with good design, removed trading fees, and partnered with projects who share a similar vision.
AirSwap isn’t a revenue-seeking project; this decision helps the team focus on the product experience. Our team seeks to create tools to enable traders and developers to easily interact and build their own solutions on top of AirSwap. Moving forward, we are aiming to open source more and more of AirSwap over time.
Our main competitors are projects such as Uniswap. As mentioned earlier, every DEX has a different design that sacrifices some components and benefits certain users. If you take Uniswap, they are a fully on-chain pool of liquidity with the ability to create liquidity instantly and in any token. This peer-to-contract model is very powerful and covers a lot of cases, but unfortunately, the functionality of personal pricing eliminates the competition between market makers. If you are a trading desk facilitating large trades, you wouldn’t want to put your balance sheet in a pool and have a pre-deterministic pricing formula dictate your trades. Instead, you would want to show competitive prices and beat your competition to “winning” a trade. This is the design AirSwap followed, and the technology we developed is built to attract large players. In fact, our average trade size is nearly 5x larger than UniSwap’s.
DEX remains a niche market when comparing volume with centralized trading platforms. But as our volume shows, I believe we are starting to see a shift in traders mentality since the beginning of 2019. People are starting to better understand the benefits of decentralization and ownership of their assets.
What’s your position on the regulatory landscape today?
The regulatory landscape still remains largely uncertain, making it difficult for market participants to build new, innovative products. Nonetheless, there are many regulators from around the world entering the space to help shape the future of the industry. It’s still too early to say definitively whether the regulatory landscape around blockchain technology is leaning net positive or negative. All market participants must seek to collaborate with regulators to better understand each others’ perspectives and goals for the industry. We believe that we can together create a mutually beneficial future.
What are your goals for the future?
With AirSwap, we are highly focused on products and user experience; the decentralized exchange and the wider-blockchain ecosystem are criticized for lacking simple, usable products for everyday people. In 2019, we relaunched AirSwap Instant, launched DexIndex, and continually improved other products like the AirSwap widget. Our team’s deep understanding of the user-friendly design and ability to synthesize user behavior and feedback to actionable product features gives AirSwap the competitive edge.
For the rest of 2019, we are focused on the continual improvement of these products, as well as a brand new trustless escrow product AirSwap Trader. With easy products like AirSwap Instant, we are able to quickly service the needs of traders who seek a no-frills, frictionless way to trade on the Ethereum blockchain. Our new escrow product will service the use-cases that have formed outside of the capabilities of AirSwap Instant. With each improvement and new product, we strive to grow user adoption of the AirSwap network.
What are your future thoughts for the DeFi market?
We are excited and optimistic that Ethereum blockchain solutions will have a significant impact on legacy finance. Decentralized Finance (DeFi) projects, such as MakerDAO, Dharma, and dYdX are already gaining popularity beyond Ethereum and into the wider-blockchain community.
We built AirSwap Trader, which enables any individual to exchange value with one another without the need for any intermediary. There are many traditional financial institutions that already and will continue to develop blockchain-based systems for trading, settlement, and reporting.
At the Fluidity level, we are always exploring new ways to bring legacy financial structures onto the blockchain.
We recently announced that we will be working with MakerDAO and other DeFi lending applications to allow borrowers to leverage real-world assets (like U.S. Treasuries) in decentralized credit facilities. This model is called the Tokenized Asset Portfolio (TAP), and we are really excited about this new project and hope you can learn more about it.
Where can we go to learn more?
More about AirSwap