WOWswap is a protocol on the Binance Smart Chain (BSC) for applying leverage when trading on PanCakeSwap. It allows users to apply up to 5x leverage on selected tokens. The platform is scheduled to go live in the beginning of April. The token sale will occur before the platform launch in order to obtain tokens for providing liquidity.
WOWswap may be compared to dYdX on Ethereum. dYdX is a decentralized margin trading platform which allows users to take up to 10x leverage. The platform has not yet announced a token supporting it. Among the investors of dYdX are a16z and Polychain Capital.
When you are using WOWswap you are technically borrowing funds from a liquidity provider which are then used in order to execute the desired trade. The borrowing mechanism allows the user of the protocol to trade with money that he does not actually has. This is essentially what trading with leverage is all about.
WOWswap will initially launch the most liquid tokens on PanCakeSwap for leverage tokens. The tokens listed will be:
- CAKE
- ETH
- BTCb
- AUTO
Token Economics
The token supply of WOWswap tokens is 1,000,000 tokens. 5% of the profits for trading on WOWswap are subject to fees. Half of the fees collected will be used to buy back the token and subsequently burn it. This mechanism was chosen in order to decrease the token supply and create a deflationary currency. The other half will be allocated towards an insurance fund. The insurance fund is planned in order to compensate users in case of black swan events.
The token is further used for governance purposes. Token holders will be able to vote which tokens should be listed next on the exchange. On top token holders can decide about the protocol fees and margin limits.
Airdrops & Token Sale
WOWswap initially rewarded early community members with airdrop allocations for joining the Twitter community and the Telegram group.
The WOWswap token sale will take place on February 25, 2021 and will last for three days. In order to acquire WOWswap tokens you will need to send BNB to a smart contract address provided by WOWswap. In exchange you will receive the WOWswap tokens back.
Furthermore, 55% of the token supply will be distributed to protocol users, liquidity providers or will be used for marketing activities.
Further Information
- An external security audit by Certik is planned by the WOWswap team.
- Trading on leverage is highly speculative and not recommended for inexperienced users. If a liquidation event is triggered it could mean a total loss of funds for the investor. Proceed with caution when using platforms like WOWswap for trading. In case you do not wish to trade yourself you can provide liquidity on WOWswap and obtain an interest in exchange.