Tinyman’s Swap Router: Providing Better Prices for Traders
The Tinyman team is thrilled to announce the launch of our newest feature — the Swap Router.
Swap Router is designed to maximize the amount of output asset you’ll receive when trading in the Tinyman app. The Swap Router feature ensures the best possible on-chain prices for traders in the Tinyman app.
What is the Swap Router?
The Swap Router is an on-chain group of transactions developed by the Tinyman team to help traders get the most out of their trades. Unlike the normal swap function, which executes a swap through a single pool in Tinyman, the Swap Router checks multiple pools and alternative routes to find a better exchange rate. This leads to more favorable prices and an improved swap experience overall.
How Does it Work?
Using the Swap Router can potentially provide a better exchange rate and lower price impacts compared to using a single pool. It does this by using multi-hop swaps and taking transaction fees into account. Using the Swap Router may increase transaction fees, but it will still provide a better output amount by checking multiple pools and routes. The fees are also taken into account during this process, so users can be confident they are receiving the optimal exchange rate available.
For example, in a normal swap, the exchange rate is based on a single pool minus a single transaction fee. However, with the Swap Router, the exchange rates of multiple pools are checked, and all related transaction fees are subtracted to find a better exchange rate. This results in a better overall swap experience for the user.
Utility of Swap Router
Swap Router is primarily useful in situations where there is not enough liquidity in a single pool to complete a trade at an optimal exchange rate, to potentially provide a better exchange rate and lower price impacts compared to using a single pool.
In Tinyman, most ASA pools are typically created with ALGO, which results in ASA-ALGO pools having the deepest liquidity. Despite the majority of trades being processed through these pools, there is still some demand for trades between ASA-ASA pools. However, due to the lack of liquidity in most ASA-ASA pools, Tinyman users had to manually search for related pools and calculate one-by-one if using these pools would be beneficial and their relative prices. This process was not only time-consuming but also inconvenient since pool rates and best alternative routes change frequently.
The Swap Router function in Tinyman now handles automatically what was once a recommended trading method in shallower pools. It explores all possible alternatives of Tinyman pools and recommends the best possible price. This feature is particularly useful for ASA-ASA trades that lack sufficient liquidity to offer a fair price, as it eliminates the inconvenience of manually searching for related ASA to ASA routes. With Swap Router, Tinyman users can now enjoy the seamless trading experience that is offered in Normal Swaps, even for trades between ASA-ASA pools.
Is it Different from Normal Swaps?
From a technical standpoint, using the Swap Router is essentially equivalent to executing the Normal Swap function multiple times. Both the Swap Router and Normal Swaps interact with the Tinyman v2 contracts. Since all of the resulting transactions are grouped into a single operation, using the Swap Router should not feel significantly different from using Normal Swaps by the users. Additionally, the Swap Router feature is optional and users can choose to enable or disable it.
The Swap Router feature is an exciting new addition to the Tinyman app, which aims to provide traders with the ultimate swap experience in decentralized finance (DeFi). We are committed to offering our users innovative and cutting-edge solutions that cater to their trading needs, and the Swap Router is a significant step in that direction. We welcome any comments or questions you may have regarding the Swap Router or any other features on our platform. You can find us on our socials!