SpiritSwap AMA Questions and Answers
① For how long was SpiritSwap in development? Was there pressure to release at the same time as Spooky or was this a marketing push coordinated with FTM Foundation?
We were in development for about 2–3 weeks. We hired a dev to help us since we all worked full-time jobs at the time.
We felt a little pressure to release, which made us want to push things out faster. I think that’s just our nature as humans. We internally wanted to get Spirit out there building TVL alongside Spooky. We released one week after Spooky. Learned it’s good not to rush things out too fast.
② SpiritSwap at the moment has a higher swap fee than the main competition (0.1% more), do you plan any features to balance that?
Swap fees are the main mechanism to protect LPs against impermanent loss, so we didn’t want to change that from Uniswap’s original designs. Our swap fee is 0.3%, which is the same as Uniswap and Sushiswap. On Fantom, a few dexes have 0.2% swap fees, and even lower but Uniswap and Sushiswap are the experts in this area so I think by following in their steps we can’t really go wrong.
Currently, we don’t have any features that directly balance that, such as swap fee reductions for certain users (like inSPIRIT holders) and the reason for that is because we would have to redeploy our AMM, which would need a migration and could be a hassle while we are focused on other things.
We do have features planned that will increase volume. This includes increasing liquidity and arbitrage opportunities on SpiritSwap. We believe that most volume will go to where the liquidity is at, so we want to focus on improving liquidity to increase volume. We also want to improve our swapping experience in general, so that includes updates to the UI/UX.
③ Do you have any plans to move the emissions on a per second basis, given that Fantom’s block time is constantly changing? And if so, how complicated would that process be at this stage?
If we upgrade our MasterChef in the future then yes. We just wanted to release it with minimal changes. Making a lot of changes to MasterChef could possibly introduce some kind of exploit. We also wanted to get our AMM released to make sure we were to market in a timely manner.
④ How do you decide on “partnerships” , is that a team decision or is someone that acts as a “leader” until Spirit will be DAO?
It’s a very fluid team decision. Initially, one of us may be approached with some interest, we will talk as a team, research the project and if it checks out, we will move into further discussion. Introductions come from everywhere:
- Fantom Foundation
- Discord members
- Discord mods
- Team members
- Other teams intro us to other teams
We’re here to help build Fantom and we want what’s best for the Fantom Community. We want to work with everyone we can. That’s what we want Fantom to be about.
⑤ If you could launch again, what would you change?
Polishing our product before launching. We would launch with more use cases for SPIRIT token as well as better control inflation, for example, by vesting farming rewards. As for airdrops, we would probably consider going for a more widespread one, to increase our user base.
⑥ Can you elaborate on the use cases of inSPIRIT a bit more? Or future use cases if possible?
There are three parts to inSPIRIT:
- Governance, to give holders the chance to vote on pool allocations;
- Farm boost, to increase APR in farms;
- Protocol revenue, swap fees go to inSPIRIT holders.
Future use cases:
- inSPIRIT wrapper like yveCRV, deposit CRV in yearn and harvest CRV profits every week;
- Once a wrapper is made, inSPIRIT becomes tradable, opens up use cases in DeFi;
- Stabilizes the price and lowers selling pressure.
⑦ How would boosted farming APRs through inSPIRIT work for LPs deposited into yield optimisers like Reaper and Grim?
Reaper and Grim would have to hold inSPIRIT to receive the reward multipliers on their vaults. This helps with adoption because if lots of autofarms hold inSPIRIT, they have a stake in SpiritSwap and SpiritSwap succeeding will be beneficial for them. Incentives are aligned.
⑧ Can you give more info about the partnership with Tosdis Finance? Does this mean that SpiritSwap will be getting more TVL through this partnership?
Tosdis has numerous IDOs in the pipeline, and they will be driving liquidity from those IDOs to SpiritSwap. So far, we have created a farm for Tosdis. We will also be using their “defi as a service” and making a farm on their platform with SPIRIT incentives.
⑨ What are you doing to counteract the inflation that is happening?
inSPIRIT will reduce the circulating supply of SPIRIT (locking, voting mechanisms). We are also adding more features where SPIRIT will be used, like a win-win lottery and partnerships with some cool lending projects.
⑩ In your GitBook, it is mentioned that protocol income is distributed to inSPIRIT holders. Can you elaborate more on this?
This refers to the protocol fee that is included in swap fees on SpiritSwap. There’s a 0.30% swap fee: 0.25% goes to LPs while 0.05% will used to buyback SPIRIT and distributed to inSPIRIT holders in the near future.
⑪ You’ve announced your partnership with Graviton a month ago, can you give us any updates/progress to how that is going? Can we expect to see SPIRIT liquidity on other chains?
SPIRIT is already available on BSC, but there isn’t any liquidity at the moment. Graviton will be helping us with this once they release Catalyst.
⑫ Any plans to make cross-chain zapping of LPs a reality in the future?
No plan for that right now.
⑬ What do you think about the change of implementation made by Uniswap v3 and Curve v2. What do you think about those? Are we going to see a SpiritSwap v2 based on some of these concepts?
We’re big fans of Uniswap v3 and Curve v2. It will be hard to compete with them on this front because they are two of the best teams in DeFi, so we are going to be taking our own route.
We will keep UNI v2 model, which already has support for many autofarms, aggregators, analytics and leveraged yield farming. This will help with integrations and adoption. We will try to solve the capital efficiency problem in a different way.
⑭ What do you really feel separates Spirit from the competition?
Firstly, our team is always listening to the community and doing the best that we can to both fulfill our members’ wishes as well as push SpiritSwap in the right direction for the longevity of its future. A big part of SpiritSwap that differentiates us from the competition is our upfront and honest approach to building partnerships and chatting with the community. We have members that have doxxed themselves to build trust with our users and partners and eliminate that uneasy feeling of not knowing who is behind the screen. Additionally, two of our members are full-time SpiritSwappers, showing our dedication to the longevity of this business.
Secondly, our team is dedicated to extraordinary customer service. We are here to answer all and any questions, do our best to serve the community, communicate to people on all platforms, and have fun while we’re at it. You can see through our Twitter that we connect with our community very well, and if there is ever any issue, we are more than happy to connect via DMs. We strive for above and beyond customer service and will continue to do so.
Lastly, we have a fantastic work structure. We are organized, dedicated, and enjoy each other’s company. We connect via Gather in a virtual office and work together at all times of the day. Our devs communicate with us with ease and speed. We also have the best, most dedicated mods and admins who will work as hard as they can to push SpiritSwap forward. They present their own creative ideas, gather valuable feedback to appease the community, bring valuable insight to technical challenges, and scour the DeFi world for the best partners.
⑮ Can you give us a break down of exactly what Spirit v2 means?
Not exactly a v2 because we will be keeping the same AMM; however, we will be making improvements with some other features. Can’t go into too much detail because we are still in the research phase, but the overall goal of SpiritSwap v2 is to improve capital efficiency while keeping the UNI v2 AMM design.
Best place to start is “What can be improved with our current AMM?”
Our AMM is a constant product Automated Market Maker, which makes it possible to deposit any two tokens and ensure that there will be liquidity at any price range the tokens go to. This is good because it makes it simple to provide liquidity and everyone is accustomed to it; at the same time, it is inefficient to provide liquidity at every price range, because tokens typically trade in given ranges.
For example, on the FTM-USDC LP, it will provide liquidity for FTM from 0 USDC to infinity USDC, FTM has been trading between 0.20 USDC and 1.00 USDC for the past 6 months, so all the liquidity outside this range isn’t being used. We want to make use of this unused capital.
The way UNI v3 and Curve v2 do this is they concentrate the liquidity in the given price range. That way all the liquidity is being used and slippage is low for swappers. The way we want to go about it is to allow people to extract that unused capital in the form of a loan. Users will be able to use their LP tokens as collateral to mint a stablecoin. Then they could do whatever they like with that stablecoin.
In a sense this is similar to concentrated liquidity because the main thing that concentrated liquidity does is it allows LPs to provide liquidity, using less capital, while achieving the same result (which is lower slippage for swappers). The difference in what we’re doing is instead of requiring less capital upfront, we will require the same amount of capital, but LPs will be able to extract value out of that capital by minting a stablecoin.
They can then do whatever they like with that stablecoin; for example, if they lend it to someone, they are now earning swap fees and interest from lending all with the same amount of capital that they began with.
Our overall goal is to make it possible to yield farm and earn swap fees, while taking a loan against that position to do other things.
⑯ What’s the feature that you’ve released (or yet to release) that makes you the most proud?
v2 design/capital efficiency. As we mentioned in the previous question about SpiritSwap v2, we are very excited about the potential of SPIRIT’s new use cases. We are most proud of our ability to continually create and design new technical advancements in DeFi. If we are talking about features we have already released, then it is definitely our zap feature. The user experience is so smooth, and the community had rave reviews.
⑰ Will Reaper have to send inSPIRIT to all of their SPIRIT strategies to max out the APY?
No, they will only have to hold it in one address to receive the boost on all of their vaults, similar to how it is for Yearn and Convex with veCRV.
⑱ Have you thought about introducing Impermanent Loss Protection as another means to bring more liquidity to the project?
Not actively working on it but thinking about it.