Innovative teams across the cryptocurrency space run into the same problem.
The initial offering is successful. Coins have been minted and distributed during the private sale. Value spikes. Several DEXes pick up on the success of the project and list the token on their exchanges.
But there isn’t enough liquidity for the team to swap meaningful amounts of the ICO token out. It often takes months of painful waiting before tokens can be exchanged for stable coins or other value.
Team members and investors of low volume alt coin BONDLY easily incur slippage of 50-70% from larger trades. With smaller liquidity pools, market value of a coin is also drastically impacted by volume buys, increasing volatility for traders (in this example, market takes a 60% value hit).
They are faced with two options:
- Swap out for insane slippage rates and risk crashing valuation of their own coin
- Wait for months while the market shifts drastically
Some adventurous founding teams take to exchanging their tokens to private parties through a trusted broker or just bare trust, a process not unlike solutions found since man learned to trade. This solution carries high risk, whether it be high broker fees or the risk of being burned by unscrupulous trading partners.
All of these problems can be solved through a trustless P2P DeFi app.
For example, the Dexpools DeFi platform allows founding teams and their network to easily make swap offers on a variety of chains (Eth, AVX, to name a few).
Instead of a physical broker, the Dexpool smart contract allows a user to create a swap offer, send the offer to another wallet, and facilitate the trade safely and securely for both parties.
This opens up the door to both increased liquidity in the aftermarket and also sophisticated and retail traders wanting to get their hands on highly sought after ICO launches.
P2P OTC platforms like Dexpools work especially well with existing decentralized exchanges like UniSwap or SushiSwap as well, giving traders optionality to create p2p offerings if slippage rates are too high, which is often the case with larger volumes of trades or even small exchanges of low liquidity coins (ie ICOs, IDOs).
DeFi continues to grow, and while DEXes are a great option for many trading scenarios, ICO and IDO teams will find immense value in P2P OTC platforms, while the crypto ecosystem will find benefit through greater access to new cryptocurrency projects.
DEXPOOLS is a decentralized, peer to peer (P2P) OTC DeFi platform. Individual buyers and sellers are able to create trade offers bound to specific wallets and execute a trade via smart contracts. There is no need for an escrow custodian or any trusted third party in the process.
Both buyers and sellers can set up swaps with literally zero slippage or impact on low liquidity markets. The only cost to use the platform is a low transaction fee for both trading parties vs the high slippage seen on most DEXs which can at times exceed 20-30%.
Our Whitepaper: Dexpools P2P OTC crypto brokerage platform Whitepaper
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