Ethervista started as a decentralized exchange (DEX) combined with a memecoin issuance platform. The project's vision is to turn Ethervista into a multichain DeFi hub with a full suite of tools to serve user needs such as Lending/Borrowing, Flash loans, Futures.
Differences in Ethervista's operating model
As a latecomer DEX compared to its giant predecessors like Uniswap orSushiSwap , what strategies does Ethervista have to create a competitive advantage? In this article, we will explore the differences in the project's operating model.
Ethervista AMM
The core of Ethervista's operating model and the fundamental competitive advantage lies in this new AMM model.
The project argues that traditional AMMs are challenged by a lack of incentives for blockchain projects to operate in the long term. This is because projects tend to focus on the Token price path, which leads to secret Token Dump or rapid liquidation withdrawal. The same is true for Liquidity Providers, who are not sufficiently incentivized to maintain liquidation provision over the long term.
Ethervista has introduced a new AMM model, or rather a new transaction fee collection and allocation mechanism to stabilize the interests of projects and LP.
Ethervista swap interface
First, for traditional AMM models, typically Uniswap, they usually apply a Token based fee for each transaction, which is added to the pool until the LP withdraws their LPs.
Applying this mechanism will expose Liquidity Providers to additional Token depreciation risks in addition to Impermanent Loss . Its advantage is that it helps the Liquidity Pool to continuously expand, thereby minimizing slippage in the long term (however, there will be higher than usual slippage in the early stages).
Ethervista applies a fixed transaction fee mechanism in ETH native coins. Each transaction on Ethervista DEX will incur a fixed transaction fee in USD calculated on ETH, this fee is set by the Liquidity Pool creators (LP Creator) when they first create the pool.
There are 4 transaction fee levels set up including:
- LP buy fee : Fixed USD fee paid to LP on each buy transaction.
- LP sell fee : Fixed USD fee paid to LP on each sell transaction.
- Protocol buy fee: Fixed USD fee paid to the project on each purchase transaction.
- Protocol sell fee: Fixed USD fee paid to the project on each sell transaction.
Ethervista DEX Fees
The variables must be set to a minimum of 1 USD and Ethervista DEX defaults to 1 USD, so for every transaction that occurs on Ethervista DEX, the user needs to pay at least 3 USD in ETH.
VISTA Token information
For example, for VISTA which is the main Token of the Ethervista project, when a user makes a purchase transaction of any amount of VISTA, he will be charged 10 USD in ETH and 15 USD for a sell transaction.
The Protocol fee will be transferred directly to the wallet address or smart contract set up by the LP Creator in advance to serve the project development activities. For example, Ethervista is using this Protocol fee to buy back & burn their VISTA Token . At the time of writing, up to 2.9% of the total supply of the Token $VISTA was burned after less than 3 weeks of operation.
LP fee is a fee for LP, it is continuously and "cleverly" distributed to LPs through a variable called Euler (named after the brilliant mathematician Leonhard Euler) .
Ethervista's Euler Reward Distribution Mechanism
In traditional AMMs, liquidation provision rewards are distributed based on the number of LP Token held. Ethervista adds an Euler variable to create an additional time vector for the reward distribution. This means that instead of just relying on the number of LP Token held, Ethervista measures the exact rewards that LPs receive on each transaction, the longer they provide liquidation , the more rewards they receive, creating fairness for early liquidity providers with small amounts compared to later liquidation providers with large amounts.
Specifically, it works as follows, when LP Creator initiates a trading pair, an Euler variable will be created to track the liquidation reward, initially it has a value of 0 and is updated after each transaction according to the formula below.
Ethervista's Euler Variable Calculation Formula
In there:
- Euler: euler value to calculate
- Euler-1: previous euler value
- Fee: transaction fee collected from transactions
- LP supply: total LP supply at the current time
When a new user provides liquidation to that trading pair, in addition to the LP Token received, an initial euler variable called euler0 is assigned to that LP with a value equal to the current euler value Euler0 (of the LP) = Eulern.
After a period of operation, liquidation providers will receive a chain of euler variables as follows: { Euler1, Euler2, Euler3, Euler4.. Eulern}. This chain will be the basis for calculating the reward received by that LP. Reward calculation formula:
Ethervista Liquidity Provision Liquidation Formula
In there:
- Reward: liquidation provision reward (ETH) received
- Eulern+1000: value of euler1000 (assuming reward is calculated at euler 1000)
- Euler0: the value of euler0 is initially assigned
- LP: number of LP Token held
Such a reward distribution model will help track rewards from liquidation provision activities accurately on each transaction. This will create a fair environment among LP and encourage them to maintain long-term liquidation provision.
Going back to the content of Ethervista charging fixed transaction fees in ETH instead of Token in the trading pair, we will dig deeper to XEM its impact through a specific example:
Comparison example between Uniswap and Ethervista
Given a two Token A/B trading pair with current liquidation pool value of 1,200 A Token and 400 B Token .
Both AMMs Uniswap and Ethervista work on the K = X * Y model
- From there we can calculate the liquidation constant K = 1,200 x 400 = 480,000
- The reference price at the initial time is P = A/B = 3
Suppose there is an order Swap Token A => B with volume A = 3 Token. The changes in the Pool are as follows:
- Number of A' Token = 1,203
- Number of Token B' = K/A' = 480,000/1,203 = 399,002
- New reference price P' = 3.015019
Now is the time to make a difference, for Ethervista, the project collects directly in ETH, this fee is transferred to private addresses not related to the liquidation pool, so the parameters in the Pool of the trading pair come to an end here, no more fluctuations.
With Uniswap and most other AMMs on the market, the transaction fee is calculated in Token (in this example, Token A), which are added back to the liquidation pool. Therefore, the new pool dynamics are as follows:
- Number of Token A'' = A' + fee = 1.203 + 0.009 = 1,203,009
- Number of Token B'' = B = 399,002
- Constant K has changed K'' = A'' * B'' = 480,003.591
- New reference price P'' = A''/B'' = 3.015041
Thus, for Uniswap , after each transaction, a small amount of Token is added to the Pool, pushing the reference price further away than Ethervista, but in return, it increases the liquidation K. In the short term, Uniswap 's price may fluctuate more, but in the long term, when the constant K increases significantly, the slippage in each transaction will decrease a lot compared to Ethervista.
As for Ethervista, although there is no mechanism to reduce long-term price slippage, stability is maintained throughout.
You can read the article about AMM here to better understand the operating mechanism of liquidation pools.
As mentioned in the above section, the smallest fixed fee that a user has to pay is $3/transaction, we will try to calculate to XEM what volume will benefit the user.
Comparison table of transaction fees of popular DEXs
Old traditional DEX v2 versions such as UNI, Sushi or Pancake apply a fixed fee of 0.3% of volume. Version v3 applies a Fee Tier Chia form chosen by LPs ranging from 0.01% to 1%.
At a minimum, a swap order on Ethervsita incurs a $3 fee, corresponding to $1,000 of volume on Uniswap v2 and $300-30,000 on v3 depending on the fee tier. So if the trading volume is larger than $1,000 and the pair does not have a v3 version, Ethervista is more profitable.
However, that is the minimum case, LP Creators rarely set that fee, usually pairs on Ethervista will have a fee ranging from $5 - $10/transaction.
Look at the boxes highlighted in red for an example of a $10 fee. To benefit from the swap fee, the volume on Uniswap v2 needs to be greater than $3,300 and between $1,000 and $100,000 on v3.
Overall, in terms of average users with small to Medium volume , there is not much of a competitive advantage for Ethervista, especially for v3 pools with small fees, Ethervista has even less of a competitive advantage.
Looking at the overall operating model, Ethervista is looking to build more value for the project and liquidation providers.
Ethervista aims to drive projects to benefit from the volume of transactions rather than just the Token price. This incentivizes them to go the long haul, generating more transactions. On the one hand, this model also incentivizes LP commitment through a passive income stream in native ETH from transaction fees.
Memecoin issuance platform
Memecoin is probably the hottest keyword of the cycle as every ecosystem wants to claim a piece of this keyword. I don't know how many memecoin seasons have happened, but this movement has never cooled down.
Starting with PEPE on Ethereum in mid-2023, followed by Bitcoin memecoin in late 2023 early 2024. Then came an unprecedented memecoin season on Solana that transformed the network’s brand identity from a high-speed Parallel Blockchain to a “meme chain,” with Solana ’s peak month generating nearly half a million new Token . Then came Base meme season, Ton meme season, and TRON meme season.
Going full circle but since the Ethereum Spot ETF event, the network has become strangely gloomy. Ethereum and meme enthusiasts are always looking forward to the memecoin movement returning to this ecosystem with the largest liquidation in the crypto market.
Similar to pump.fun on Solana ormeme on TRON, Ethervista is looking to bring the memecoin movement back to Ethereum through their memecoin issuance platform.
Ethervista provides a fairly simple toolkit for users to create their own Token . Users just need to enter the name, symbol, total supply and press Create.
Ethervista Token Generation Interface
Unlike other memecoin issuance platforms, Ethervista is not exactly a fair launch, its Token Issuance process is Chia into 3 main steps: creating Token, adding LPs and finally updating metadata.
As for pumpfun or sumpump, the entire supply will be released to the market in the form of a Bonding Curve, and if the creator wants to own it, he still needs to spend money to buy it. As for Ethervista, the creator can arbitrarily add any amount of liquidation pairs. This can be confusing for non-tech-savvy people in checking whether the entire supply of Token has been released to the market or not.
Number of trading pairs created on Ethervista. Source: Dune, September 18, 2024
According to data from Dune (@0xToolman) , after 3 weeks of operation, there were 959 Token pairs created, 198,000 swaps, and $458 million in volume.
Features under development
AMM DEX and memecoin launch are the two most prominent features of Ethervista at the moment. Besides, with the vision of becoming a multichain DeFi hub, Ethervista is developing other functions including:
- Lending
- Futures Trading
- Flash Loan no fee
With the core concept of ETH native fixed fee, it is expected that the above features will also apply a similar model.
In addition, earlier this week, the project successfully deployed to the Base and Arbitrum networks, and soon to Soneium (Sony's Layer 2 ), a step forward in its plan to realize its multichain vision.
Conclude
Overall, with Ethervista, I personally evaluate it as not a breakthrough in technology or operating model, but an innovative choice. Ethervista has chosen a model that highly incentivizes projects and LP, motivating them to maintain long-term commitment, the remaining problem lies in user acceptance.
Memecoin is probably also a good choice for Ethervista, instead of having to compete directly with DEX giants, building an ecosystem around the memecoin movement will help the project breathe easier during the startup phase.
With what the project has done and is doing, it can be seen that the Ethervista team is knowledgeable and experienced in the crypto field.
Above is information about the operating model of Ethervista - multichain DeFi hub & memecoin launch, hope the article can help you in the research process.
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