Summary

QuickSwap is an automated market maker on the Polygon network, a copy of Uniswap, which uses the same liquidity pool model. Users add token pairs to the liquidity pool and earn transaction fees from users who use the pool to swap tokens.

QuickSwap is popular due to the fast settlement speed and low fees of the Polygon network. QuickSwap is also compatible with the Ethereum blockchain and can exchange ERC-20 tokens. However, users are still subject to the risk of impermanent loss.

QuickSwap’s cryptocurrency is called “QUICK” and can be easily bought and sold on Binance. In addition, other tokens can be exchanged for QUICK using QuickSwap’s liquidity pool.

Introduction

Automated market makers (AMMs) such as QuickSwap are very popular in the decentralized finance (DeFi) space. The Uniswap model has become a standard across different blockchains and Layer 2 platforms. QuickSwap has the same functionality as Uniswap, except that it relies on the Polygon network instead of Ethereum. QuickSwap is a fork of Uniswap, but the main difference between the two makes QuickSwap popular with some users.

What is QuickSwap?

QuickSwap is a fork of Uniswap, created by Nick Mudge and Sameep Singhania on the Polygon blockchain platform. It uses the automated market maker (AMM) model to create a decentralized exchange (DEX) for users to exchange tokens. QuickSwap has no order book, and users trade in a token pool called a "liquidity pool."

Users can transfer ERC-20 tokens from Ethereum to Polygon, and trade any token pair through QuickSwap as long as there is a corresponding liquidity pool. As long as a token pair is provided, a new liquidity pool can be established to earn transaction fees from other users.

QuickSwap’s interface, look and feel, and user experience are almost identical to Uniswap. Users can exchange their tokens without registering or completing any KYC (identity verification) process. Simply connect your wallet to the platform and pre-deposit MATIC to pay for the transaction. QuickSwap is also an open source product that uses Uniswap’s audited code to gain a certain degree of trust and security.

What is Polygon (MATIC)?

Polygon (formerly known as "MATIC") is an infrastructure for creating Ethereum-compatible networks. These blockchains can also interact with each other to build an interconnected blockchain Layer 2 ecosystem. The Polygon Network is the official sidechain of the project and uses a proof-of-stake consensus mechanism for security.

The Polygon network is attractive to many users due to its fast scaling solutions and low gas fees. Transaction fees are paid in MATIC tokens. The network is compatible with the Ethereum Virtual Machine, and developers can fork existing DApps (decentralized applications) (such as Uniswap forking a sidechain).

Why not use Uniswap, and choose QuickSwap?

Many users choose Polygon because of its fast transaction speed and low fees. Liquidity providers and exchangers can use Uniswap's audited code and enjoy the advantages of the Polygon network that supports ERC-20. A major benefit of this move is that ERC-20 tokens can be traded using a simple blockchain bridge, avoiding the high fees of Ethereum. Therefore, QuickSwap strikes a balance between Ethereum compatibility, ease of use, and price advantages.

How does QuickSwap work?

QuickSwap uses an automated market maker model to create a liquidity pool for exchanging tokens. Users do not trade as order makers or takers, but interact with smart contracts. As long as a pair of tokens of equal value is deposited, liquidity can be provided.

Liquidity providers are rewarded with liquidity pool (LP) tokens as a receipt for their share of the pool. When exchanged for tokens, these LP tokens are destroyed. These tokens can also be provided to third parties for liquidity mining. The proceeds are continuously reinvested in the pool, generating compound interest.

QuickSwap's AMM model rewards all liquidity providers with 0.3% of the fees, which is distributed according to each person's share in the liquidity pool. The token price is not determined by the order book, but by the "constant product market maker model".

Let's take the ETH/DAI liquidity pool as an example. ETH is variable x, and DAI is variable y. According to the "constant product market maker model", x is multiplied by y to get a constant value k.

x * y = k

Liquidity pools provide an exchange rate. In this example, 3,000 DAI (y) can be exchanged for 1 ETH (x). 3,000 DAI are injected into the pool and 1 ETH is withdrawn. The supply of DAI increases and the supply of ETH decreases. Since k is constant, the price of ETH increases. In other words, users are buying ETH with DAI. As ETH is withdrawn from the pool, its price will continue to rise compared to DAI. The following figure shows the relationship between the quantities of the two tokens.

What is impermanent loss?

Liquidity providers are at risk of experiencing impermanent loss. If the token price changes from when you invested, the USD value you eventually redeem will be lower. Note that this can happen if the price goes up or down. Losses are impermanent because you only lose money if you withdraw funds from the liquidity pool.

If the price returns to its original level, the impermanent loss will reverse. Of course, dividends can sometimes exceed the impermanent loss. To learn more and study the math behind impermanent loss, read our guide What is Impermanent Loss.

How does QuickSwap make money?

Unlike centralized exchanges, QuickSwap does not make money by charging users. Liquidity providers are the ones who actually earn trading fees. Like Uniswap, it charges a 0.3% fee for swapping tokens using a liquidity pool. Users can claim their earned trading fees at any time, and even reinvest them, and then receive fees in proportion to their liquidity.

How to use QuickSwap?

QuickSwap can be accessed via a desktop web browser or mobile device. The following link must be used: quickswap.exchange. Select a liquidity pool, stake your tokens in it, and earn fees easily.

1. Visit quickswap.exchange on your desktop or mobile browser.

2. Associate your wallet. You need to use a desktop browser plug-in wallet or a mobile wallet app. MetaMask and Trust Wallet are both good choices. In addition, the wallet should also support the Polygon network.

3. Click the [Exchange] tab to start exchanging tokens.

4. Select the token you wish to exchange and receive. In this example, we are exchanging MATIC for PBNB.

5. Click [Swap].

6. Preview the transaction in the pop-up window, then confirm the transaction request in your personal wallet.

QuickSwap (QUICK) Token

QUICK is an ERC-20 token and the governance token of QuickSwap, which was launched in February 2021. 90% of the total token supply is rewarded to liquidity miners, making liquidity providers shareholders of the platform. QuickSwap adopts a common governance model used by other DeFi projects, including Uniswap and PancakeSwap. QUICK holders can create proposals and vote on new features or changes to the platform.

How to buy QUICK on Binance

QUICK is now listed on Binance. Currently, you cannot buy QUICK with a credit or debit card, but you can exchange QUICK tokens for cryptocurrencies. Binance offers the following trading pairs: BNB, BTC, BUSD, and USDT.

If you are not ready to exchange QUICK cryptocurrencies yet, you can use the [Credit/Debit Card] service in the [Buy Coins with One Click] tab on the Binance homepage. Please read the guide "How to Buy Bitcoin on Binance with a Credit or Debit Card" for details.

If you hold BUSD, BNB, or BTC, visit the [Classic] trading page and select the token pair you wish to trade in the upper left corner. You can use the search function to narrow your search.

In this example, we choose QUICK/BUSD. On the right side of the screen, enter the total amount you wish to buy in BUSD. The fastest way to buy QUICK is to use a market order in the spot market to buy QUICK at the current market price.

Finally, click [Buy QUICK] to submit the order and confirm the details.

How to sell QUICK on Binance

The steps to sell QUICK are many of the same as the above tutorial. QUICK tokens need to be deposited into a Binance spot wallet. Tokens in an external wallet first need to be transferred to a spot wallet. Visit the [Fiat & Spot] interface and click the [Deposit] option next to QUICK in the [Crypto Balances] tab.

For detailed instructions, please read the guide on how to deposit on Binance.

Visit the [Classic] trading page and select the token pair you want to trade in the upper left corner. You can use the search function to narrow the search. In this example, we search for QUICK/BUSD.

The fastest way is to use a market order to sell QUICK at the current market price. On the right side of the screen, click the [Spot] tab and select [Market Order] for the order type. Enter the number of QUICK you want to sell and click the [Sell Quick] button.

Summarize

QuickSwap is a new way to trade tokens in a decentralized manner. Compared to Uniswap or other Ethereum AMMs, you can trade ERC-20 tokens faster and more cost-effectively using only a Polygon address and a small amount of MATIC tokens. However, this feature is unlikely to attract users in the long term. Faced with the upcoming Ethereum 2.0, QuickSwap may be at a disadvantage in terms of fees and speed.