What is Spookyswap?
SpookySwap is a one-stop-shop for DeFi users on the Fantom Opera Network. The project was deployed in April 2021 as the first Fantom native AMM Decentralized Exchange. Their goal is to capitalize on Fantom’s speed and negligible gas fees to make trades faster with reduced slippage, better arbitrage opportunities and an overall improved user experience. SpookySwap has evolved to include diverse features such as limit orders, liquidity farming, bridges to & from other chains, a governance token (BOO), a token buyback program (xBOO), and an NFT series. Although the site may appear haunted with tombstones, potions and bridges to ‘the other side’; rest assured that the SpookySwap cats Grim and Ace and the rest of the team are there to help you on your DeFi journey.
The project has been a fierce promoter of the Fantom Opera network, giving grants to developers, creating outreach programs and offering giveaways to draw new users to the network. By continually upgrading services and working closely with the community, SpookySwap has defined what it means to be a tier one project on the Fantom network. At the time of writing, it is the largest Fantom native project with a total value locked (TVL) above $1.3 billion.
“Yes, the protocol is entirely community funded! BOO had a fair launch with zero pre-sales or other investors of any kind. Since launch, we have avoided venture capitalists. We use the Fantom Foundation’s incentives to benefit BOO holders; primarily through the xBOO-wFTM pool.”
Trading on SpookySwap
SpookySwap is a great starting point for users new to Fantom with over 200 trading pairs between nearly a hundred different tokens. Users can instantly trade at market rates using SpookySwap’s first product, an AMM DEX. Traditional centralised exchanges are owned privately. This third party has complete oversight over transactions and customer details. They also retain full custody of all assets being exchanged. On the contrary, decentralized exchanges do not require KYC and allow for non-custodial transactions. This means that the assets exchanged never pass through an intermediary. There is a 0.2% fee for all AMM swaps on SpookySwap. Of this fee, 0.03% is used to reward xBoo stakers (more on this below) with the rest distributed back to liquidity providers in the pools.
SpookySwap Limit orders
To provide users greater control, limit orders were introduced which allow orders to be placed and filled at set price or better. A limit order is not guaranteed to be filled as the price level may not be met which can result in missed opportunities. This functionality allows for more complex trading strategies such as setting an order to buying the dip when the price is lower or to take profits at a certain level. Users pay a 0.02% fee on top of the standard fee to use limit orders.
SpookySwap Expert mode trading
For those experienced traders looking to take it up a notch, SpookySwap offers an expert mode for both AMM and limit trading. Users continue have access to all of the features of the standard trading view in addition to these advanced options at no additional cost. The star of the show is a tight integration with TradingView to offer detailed charts and charting tools. Additionally, there is a market summary showing recent trading history and liquidity history. The size of each trade can be identified at a glance with a fish icon for small trades, a dolphin for medium, and a whale for large.
Adding Liquidity on SpookySwap
DeFi users can help facilitate trading on SpookySwap whilst earning passive income by providing liquidity into a liquidity pool. Liquidity pools are a type of smart contract which locks two tokens locked in a constant 50/50 ratio. Users have rewarded liquidity tokens, referred to as potions on SpookySwap, for locking their tokens in this manner. To brew a potion, users must choose a pair of assets and link them on the liquidity page. Users can then go to the farming page or to Reaper.farm to deposit their ‘potion’ in a farm. After adding liquidity to a pool users share the accumulated trading fees proportionally to their deposit. These fees are paid out to users in the LPs and are automatically added to the user\’s initial deposit.
A liquidity pool auto-balances when the ratio of value of its composite assets ever slips from the 50/50 ratio. The pool will sell the overperforming asset and purchase the underperforming asset. This makes liquidity provision a useful tool in many hedging strategies. While this does open up a user to impermanent loss, it also allows a user to cover the downside. For instance, by pairing a stable coin with a volatile token a user can guarantee that they are dollar cost averaging into the volatile token when its value drops and taking profits when its value rises. SpookySwap’s high trading volume incentivizes liquidity provision because more trades means more fees which means more rewards for providers. High trading volume and the associated fees collected are one of the primary ways to mitigate impermanent loss.
In addition to trading fees, SpookySwap also incentivises liquidity providers by offering yield farming opportunities with their BOO governance token (more on this below). Users who stake their LP with SpookySwap earn BOO at predefined weightings determined by governance vote. Users must manually claim their BOO token rewards when staking with SpookySwap. These BOO rewards also offset the impermanent loss by returning value independently of the value of the underlying assets.
SpookySwap rewards liquidity providers in certain liquidity pools with its governance token, BOO. There is a maximum supply of 13,666,000 BOO with 20% being minted in the initial supply. The initial mint breaks down as follows:
- Community airdrops 7%
- Locked developer funds 5%
- BOO Single Stake IFO 4%
- IDO 2%
- New Boo Bonus 2%
The remaining supply will be emitted over 3 years with the following breakdown:
- LP farm rewards 72.7%
- Developer funds 5.3%
- DAO BOO 2%
An emission schedule can be found within the SpookySwap documents.
To reward supporters of the platform, BOO token holders can earn a portion of the protocol revenue by depositing their BOO in a single stake farm. When a user deposits their BOO in the single stake farm they receive xBOO. This xBOO represents that user’s share of the total pool’s BOO.
The value of xBOO continually rises as 0.03% of each trading fee is used to buy BOO off the market and deposit it in the xBOO pool. Each time the protocol deposits into the xBOO pool the amount of BOO each current xBOO holder is entitled to increases. This means the price of xBOO will always grow faster than the price of BOO. And because SpookySwap is one of the top DEX’s by volume, the quantity of fees being captured is one of the highest in Fantom.
Single Stake xBoo Pools
SpookySwap also offers partnered single stake farming. This allows users to put their xBOO to work generating partnered assets. This is extremely capital efficient as a user is earning both BOO and another token by staking just one asset. There are over 10 tokens to choose from at the time of writing including WFTM, LQDR and TUSD.
SpookySwap offers a bridge directly on their website in partnership with Multichain. The bridge allows users to move tokens from one chain to another for a small fee. Users can bridge assets to and from the following networks:
- Binance Smart Chain
Fees range from free to $1 to bridge to the Fantom network, depending on the token. The fee for bridging out of Fantom Opera ranges $1 ~ 0.1% of funds being bridged, depending on the token.
Introducing the Magicats
Since launch, the SpookySwap team has been a staunch supporter of the art and NFT community on Fantom. They have hosted several community art competitions which award BOO tokens. They have also minted a series of NFTs which were given away in raffles via Discord. Many of these NFTs are available for sale in online arthouses.
These forays into art laid the foundation for SpookySwap’s premier NFT project, the Magicats, a series of 5,000 generative NFTs. There are 125 unique art assets that make the set less visually repetitive. Additionally, each has been given a unique name and description to make them feel more individual. Of the 5,000 in the set, there are 13 one of a kind NFTs that are completely unique. 50% of royalties from each sale go to xBOO holders as an additional reward.
The team has committed to adding further, unspecified, Magicat utility in early 2022.
SpookySwap Security & Safety
SpookySwap\’s greatest strength is that it remains faithful to the Uniswap V2 and Masterchef code base which has been both audited and battle tested. The decentralization of SpookySwap also greatly increases its security. No one administrator has executive control over any of the platform’s meaningful functions. Reward emissions, partnerships and almost everything else is left up to the community and governance voting. Their contracts have been audited by Certik and they have open bug bounties on Immunefi.
“Our aim is to maximize decentralization so admin powers are minor with 0 functionality that can affect users\’ funds in any way.“ – EerieEight
SpookySwap has a robust and mature community centered on Discord that is rich in newbie friendly information. There are channels for new FTM projects, Magicats trading, governance discussions, AMA questions and much more.
A couple useful channels for new users are Faucet and Need Help. Faucet offers free 0.2 Fantom to cover gas for fresh addresses through their official Discord. This is great for new users who bridge assets to the network for the first time. Need Help has guides covering the most common questions and problems new users come across on their platform.
- EerieEight – Full Stack Developer & Business Operations
- Oogwei – Full Stack Developer & DevOps
- No. 4 Type C – UX/UI Designer
- Shrimpy – Artist
- Patchwork – Marketing
- 0xHephaestus – Full Stack Developer
- Owen – Outreach
While not a full DAO as of yet, SpookySwap intends to maximize decentralization and so have implemented governance voting with Snapshot. Any user can submit proposals once they have locked a cumulative 1.25k spooky for votes.