Jun 17
A Deep Dive Into STONfi
Explore the deep depths of STON.fi, a unique decentralized finance (DeFi) platform. This deep dive will uncover its unique features, underlying technology, user benefits, and its role in revolutionizing modern finance.
The decentralized finance (DeFi) ecosystem has been rapidly evolving, offering innovative solutions to address traditional finance's inherent limitations and challenges. However, one persistent issue that has hindered the growth of DeFi is the lack of interoperability between different blockchain networks.
Most blockchain networks currently operate in silos, which means assets and data cannot be easily transferred between them. This creates several problems, such as limited liquidity, complicated user experiences, reduced access to Web3 innovations, as well as additional risks and points of failure.
However, STONfi, a revolutionary decentralized exchange (DEX) built on the TON blockchain, aims to solve this problem by enabling seamless cross-chain swaps and fostering a more interconnected and accessible DeFi ecosystem.
Here, we’ll take a look at STON.fi, how it works, and what it aims to achieve, as well as what all these mean for the DeFi ecosystem as a whole.
What is STON.fi?
Established in 2022, STON.fi is an advanced decentralized exchange and an automated market maker (AMM) operating on the TON blockchain. This means users can securely and efficiently swap tokens via Telegram.
Besides the user-friendliness, STON.fi’s technology and approach come with new features that set it apart from traditional DEXs for token swapping.
For one, it eliminates intermediaries and ensures that users retain complete control over their assets without relying on third-party custodians.
This is possible via its Request for Quote (RFQ)-based DeFi protocol combined with Hashed Timelock Contracts (HTLC). Overall, all these make STON.fi’s solution for exchanging tokens more secure and more scalable than other DeFi platforms.
The TON Blockchain
Briefly on the TON Blockchain, upon which STON fi operates. The Open Network is designed for high scalability and efficiency. Its sharding technology allows the network to process millions of transactions per second, making it ideal for STON.fi’s high-volume cross-chain trading operations. More so, TON’s low transaction fees make it a cost-effective alternative to other blockchains.
The most exciting feature of TON is that it operates entirely on the Telegram messaging app. This gives several users an easy and accessible way to enter the crypto and Web3 games. Unlocking decentralized finance at this level is unparalleled, and the TON ecosystem's rapid growth testifies to its innovative pull.
Lately, TON has stood shoulder-to-shoulder with and even surpassed Ethereum when looking at the number of daily active users.
How STONfi Works
Two technical terms are particularly critical to how STON.fi facilitates cross-chain swaps: the Request for Quote (RFQ) model as well as Hashed Timelock Contracts (HTLC). In the RFQ model, traders who want to swap a certain amount of one asset from one chain to another submit a request specifying the specific tokens and the amount they wish to swap.
Upon receiving each request, the RFQ system queries various professional market-makers, who respond with quotes. The quotes include swap raptors and other relevant terms. The protocol chooses the best quote based on specific criteria and submits that to the user for execution.
On the other hand, HTLCs are a type of smart contract designed to ensure that funds are transferred only if certain conditions are met, with the main condition being both parties submitting a cryptographic proof of payment within a specified timeframe.
The RFQ model, combined with HTLCs, provides a robust framework for trustlessly moving assets between blockchains. This hybrid approach ultimately minimizes the risk of security breaches and enhances transparency.
The user flow for transferring tokens is not different from that of any other DEX, except that there are a few additional steps to accommodate cross-chain swaps. Typically, users get to connect two wallets to the platform, after which they will select a blockchain-agnostic trading pair.
After entering the amount that they wish to exchange, STON.fi calculates the exchange rate, and the user then reviews the transaction details, including any associated fees. STON.fi subsequently processes the transaction through its routing mechanism, and the user receives a confirmation when it’s completed.
This user flow ensures you can trade crypto assets across blockchains without any hitches.
STON.fi Innovations and Benefits
STON.fi introduces various innovations to the DeFi landscape that are beneficial to users. Here are some of them:
- Cross-Chain Swaps: STON.fi addresses the critical issue of cross-chain interoperability. By using RFQ-based protocols and HTLC, it eliminates the need for intermediaries and enhances security and speed.
- Gasless Transactions: This is possible because STON.fi deducts fees from the swapped tokens, eliminating the need to hold native tokens solely to pay gas fees.
- Integration with Telegram: STON.fi’s Telegram integration allows users to manage and trade assets directly within the app. This makes cross-chain trading more accessible and user-friendly.
- Virtually Zero Fees: The TON blockchain typically offers low transaction fees. This makes trading on STON-fi highly attractive and cost-effective.
- Low to Zero Slippage: STON.fi’s liquidity pools and sophisticated algorithms ensure minimal slippage, providing users with better trading outcomes.
- Developer-Friendly: STON.fi provides an open-source SDK, allowing developers to integrate cross-chain trading capabilities into their own projects. This is a means of fostering innovation and collaboration within the DeFi ecosystem.
Liquidity and Yield Opportunities: STON.fi enables liquidity providers to earn a share of trading fees and potentially earn additional yield through staking and liquidity mining rewards.
STON fi Tokenomics
$STON is the native token of STON.fi and plays a crucial role in the protocol’s ecosystem. The maximum total supply is 100 million $STON tokens, but the current circulating supply is 1 million STON.
The distribution of STON tokens is as follows:
- DAO Allocation (50%): all DAO-managed initiatives, including operational expenses. This sum is further shared as follows: 1. DAO Treasury: 20% 2. User incentive programs: 10% 3. Marketing: 10% 4. Operations: 10%
- Team and Advisors (19%): project founders and team members get 14%, while advisors get 5%.
- Investors (31%): pre-seed investors are allocated 21%, while early supporters in the private sale get 10%.
Most tokens will be locked, vested, or paid out over 1 to 3 years. In addition to participating in governance, token holders get access to various benefits, such as fee reductions.
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Conclusion
By addressing the interoperability challenges that have long plagued the DeFi ecosystem, STONfi opens up new opportunities for traders, liquidity providers, and developers alike. As the DeFi landscape evolves, STON.fi stands poised to play a pivotal role in shaping a future of seamless, secure, and accessible cross-chain asset exchange.
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Disclaimer: Nothing on this site should be construed as a financial investment recommendation. It’s important to understand that investing is a high-risk activity. Investments expose money to potential loss.
