Poolz is a swapping protocol that enables startups and project owners to auction their tokens for bootstrapping liquidity.
Poolz (POOLZ) is a decentralized exchange protocol for cross-chain auctions of fungible and non-fungible (NFT) tokens, as well as for over-the-counter transactions. The core code is optimized for DAO ecosystems, allowing startups and project owners to increase the liquidity of their crypto assets prior to listing. The Poolz platform is already integrated with several blockchains and plans to add support for the top 10 blockchain networks.
Over the past decade, blockchain technology has become increasingly relevant and popular, with disruptive use cases in almost every sector. So much so that by 2025 the global market is expected to exceed $39 billion. As such, the financial sector could be the biggest contributor to this growth, especially with the rise of DeFi.
Defi as we know them was formally conceived with the launch of Ethereum in 2015. Now, just six years later, the sector has reached over $20 billion in market capitalization. First and foremost, this rapid growth is a result of the enormous potential that technology has - privacy, autonomy, access and control for the user.
However, in order to reach its full potential, the blockchain crypto community must find solutions to some persistent problems:
3. Internet communications.
Understanding this, PoolzDeFi - a decentralized exchange protocol - creates a reliable cross-chain ecosystem with minimal trust to connect project owners and investors. In this article, we discuss cross-chain integration that supports PoolzDeFi's unified user interface, allowing users to run and participate in liquidity auctions and OTC trades across multiple blockchain ecosystems.
The goal is to achieve full decentralization, but given the resources available, the path needs to be taken in stages. Starting with the Poolz server acting as a bridge between different blockchains, the implementation of the cross chain will take place in stages and finally replace the pseudo-centralized bridge with a fully decentralized shared consensus mechanism. In other words, PoolzDeFi's cross-chain integration should move from a bridge-based model to a parachain-based model.
During the MVP phase, the Poolz platform will run on the Ethereum network (chain A). Thus, the precondition for cross-chain integration is the deployment of the same product on another blockchain (chain B). For convenience, in this article we will treat chain A as the base chain.
Thus, chain B can be any ecosystem that supports smart contracts and decentralized applications. At a very high level, the idea behind this phase is to have the platform run on multiple chains, which can then be linked through cross-chain integration. Moreover, it will also allow the use of the same POZ assets on all participating blockchains.
Once the platform is deployed on chain B, there should be a token factory on the second chain. It should be an easy way for users to create tokens on chain B with customizable options using Poolz's unified user interface.
As a company, PoolzDeFi will not control the production of tokens from said factory and will not store these tokens. Rather, each asset will be held and managed by a smart contract that will also accept token transfers from Chain A.
Integration fails if the related assets in Chain A and Chain B are not connected or tied to each other. So the next step is to implement a pegging mechanism - users will "lock" assets on chain A to generate an equivalent amount of liquidity on chain B.
The user will bear the transaction fee involved in the process and may cancel the transaction before it is completed. However, once a transaction on chain A is completed, users can only get their locked tokens back through a reverse transaction of the same value.
In order to establish a minimum trust bridge, the main function is to ensure that the total number of POZ tokens remains constant and unchanged. Moreover, the protocol must verify that the total value of the tokens generated by chain factory B is equal to the liquidity locked in chain A for any given cross-chain transaction.
On the one hand, this balance protocol will reduce the risks of double spending on the platform. On the other hand, it minimizes the need for users to trust the liquidity pool on chain A, the factory on chain B, and so on.
Moreover, by integrating the balancer into the smart contract, Poolz automates the testing function and excludes the participation of any third-party mechanisms. In this sense, equilibrium is the cornerstone for the full decentralization of cross-chain integration.
Given the above elements, Poolz implements a quarter-duplex bridge. In general, its function will be to run actions based on inputs from chain A. First of all, the bridge will perform two operations:
Check the locked assets in chain A.
Initiate token generation on chain factory B. When creating a transaction on chain A, the user will mention a wallet address on chain B. The bridge will facilitate the transfer of the token accordingly.
Let's call this phase "Return Home" - until now, tokens could only move from chain A to chain B, but after this phase they will be able to "return" to chain A from chain B. To implement this, Poolz introduces two token functions or parameters:
1. Birthplace: Indicates the native chain of this token.
2. Journey: a function to automate the return from Chain B to Chain A.
At this point, it is important to note that chain A is still the base chain in the sense that users can only initiate cross-chain interactions from chain A. Thus, the phase includes a half-duplex bridge, although assets can move in both directions.
At this point, the bridge will also be able to read input from chain B and perform the following actions:
Make sure the token is burned on chain B.
Transfer the tokens locked on chain A to a predefined address.
By implementing a two-way bridge on chain A, Poolz will establish Phase IV on the other participating chains (chain B). The Asset Lock Mechanism will be rolled out on Chain B and there will be a plant on Chain A (similar to Phase I).
Moreover, the reverse function will also be implemented in the equilibrium protocol (phase III), so that similar functions can be achieved for tokens moving from chain B to chain A. In turn, this will facilitate the creation of a full duplex bridge where cross-chain interaction can be initiated and carried out in both directions.
So far, the bridge acts as a centralized element in cross-chain integration, and it can also be considered as a single point of error. Moreover, although the process is automated and verified using an equilibrium protocol, users still need to trust the security and reliability of the chain emanating from the tokens.
To overcome these issues and achieve full decentralization in cross-chain integration, Poolz will replace the bridge with a general consensus mechanism. This will confirm cross-chain transactions regardless of the original chains. This process will involve miners or validators and will be based on the equilibrium protocol from phase III.
At present, the exact model of a decentralized system has not yet been determined, but a parachain-based architecture seems to be the most feasible.
Before wrapping up this article, let's briefly discuss how cross-chain integration can make a difference for Poolz users, as well as for the blockchain crypto community in general. First, Poolz intends to mitigate the problem that most existing cross-chain functionality requires some degree of centralization. Moreover, some of these protocols are restrictive and thus pose a serious threat to the security and privacy of the user.
Indeed, the Poolz solution starts with a centralized component, but as said, these are just means and full decentralization is the end. Secondly, the integration will create a truly interoperable network of blockchain networks, which will expand the opportunities for both innovators and investors.
Cross- chain token auctions: Innovators can sell their tokens outside of their own ecosystem. For example, an Ethereum project can sell its tokens on, say, the EOS network. This will allow project owners to use arbitrage in terms of transaction fees, scalability, and so on. Similarly, investors on the EOS network can now interact with a wider range of projects, giving them a better chance of profiting from their crypto assets.
Cross-chain OTC transactions: The integration will allow users to make peer-to-peer transactions on blockchains. The asset lock mechanism discussed in Phase II has an additional feature called TrustSwap. Typically, this allows token holders to create a pool in which only the specified wallet address can participate. This can have multiple use cases including escrowed, timed transactions, etc.
Cross-chain NFT auctions: Similar to fungible tokens, the integration of non-fungible tokens (NFT) on Poolz can also be extended to work in a cross-chain ecosystem. The functions and benefits of this will be similar to those of cross-chain auctions for fungible tokens.
Like the Internet, blockchains must be able to communicate with each other in order for the processes running on them to communicate. Only then can the technology become relevant for everyday use and achieve the promised goals.
Through cross-chain integration, PoolzDeFi will make a significant contribution to the much-needed interoperability of blockchains, as well as making them more scalable. And this too, while remaining true to the ideals of the total decentralization project. The platform aims to be a one-stop marketplace where innovators connect with investors and perform some of the most critical business functions.
In general, there are two categories of Poolz users. The first involves project owners or pool creators, while investors or liquidity providers (LPs) make up the others. In this section, we discuss the available pool types, user threads, pool states, and the Poolz governance model.
There will be two types of pools on the platform - direct selling pools (DSP) and time-based pools (TLP).
Direct Selling Pools (DSP): These are pools without a lock-up period, when investors receive a token immediately after the exchange.
Time-Locked Pools (TLP): These pools have a predetermined lock-up period and investors only receive their swapped tokens after this period has ended.
Any pool on the Poolz platform will be in either of the following states at any given time. Depending on the status of the pool (as well as the type), the smart contract will transfer liquidity and auction tokens to the wallets of their recipients.
-Created: The pool is exclusively available to $POOLZ token holders.
-Open: The pool is available to all Poolz users.
-Out of stock: The predetermined supply of auction tokens has sold out, but the pool has not yet expired. In the case of TLP, the tokens will be locked for the remaining time.
Done: The pool has expired. For both DSP and TLP, the remaining tokens are returned to the PO wallet at this stage. On the other hand, investors buy (swap) their tokens through TLP.
Closed: The pool has ended and the tokens have been paid out properly.
Funding Rounds Participated In
Documentaries, videos and podcasts
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- Impossible FinanceMulti-chain incubator, launchpad, and swap platform which offers a robust product-first ecosystem that supports top-tier blockchain projects to targeted user audiences
- Red KitePolkaFoundry is a production hub for DeFi apps on Polkadot.
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