O3 Interchange is the name of O3 Swap version 2. “Interchange” means it can connect to different networks and also support cross-chain transactions between different assets.
Bridge is a popular cross-chain solution for symmetric assets and adopted by most of the cross-chain protocols. It only allows a user to bridge X asset from chain A to chain B.
Swap(or cross-chain swap), presented by O3 Interchange, is the innovative solution for cross-chain transactions between asymmetric assets. By aggregating DEXs’ liquidity on different chains based on the Bridge, users are able to cross-chain swap X asset from chain A to Y asset on chain B.
Gas station is provided by the O3 Interchange for users to exchange gas on the destination chain. Users can exchange X asset on chain A for the gas asset of chain B based on the functionality of the Swap. This helps users to acquire the gas they need for further transactions on the destination chain and also bypass CEXs.
Hub is the liquidity center of O3 Interchange supporting the trades among Bridge, Swap, Gas Station, Peg, and Barter. It is an aggregator of liquidity pools (NPAPs - nativeToken & peggedToken AMM Pools) in which liquidity providers can add & remove their liquidity, Peg and Barter.
The vault allows liquidity providers to earn rewards by staking their LP Tokens after adding liquidity in the Hub, and to claim and unlock the earned tokens.
The new version of the O3 wallet is "O3: Cross-Chain Wallet" specially designed for mobile devices which incorporates the Bridge and Swap functions of the O3 Interchange. In addition to the natively designed UI and smooth interactive experience, the wallet allows users to do cross-chain transactions at the tip of their fingers.
The O3 aggregator is one of the critical management units in the liquidity network of O3 Interchange. After reading users' cross-chain requests, it can swap asymmetric assets across chains by utilizing the liquidity from the liquidity layers 1 and 2.
Liquidity layer 1 is the cross-chain native liquidity pools built in the O3 Interchange, also known as the native token and cross-chain soft asset automated market maker pools (NPAPs). The basic instant bridging of symmetric assets is achieved by this layer composed of NPAPs.
Liquidity layer 2 is composed of the aggregated liquidity from different DEXs on each chain. With the help of this layer and the O3 aggregator, an instant cross-chain swap between asymmetric assets becomes more efficient and secure.
Native token liquidity refers to a native token that is operable, not mapped, pegged or minted by a third party. The liquidity of the deposited native token helps to transfer the native token from the source chain to the destination chain.
Liquidity pools of O3 Interchange adopt trustless NPAPs (native token and cross-chain soft asset automatic market pools), a mechanism coupling native token with the corresponding cross-chain soft asset through ptoken pegged by O3 protocol: ntoken+mptoken(n≈m). It’s designed especially for exchange between a native token and a cross-chain soft asset to ensure users will receive a native token on the destination chain without noticing the existence of a cross-chain soft asset.
O3 Interchange liquidity pools adopt an AMM pool mechanism similar to Curve, and the utilization of liquidity is totally realized by smart contracts. This mechanism’s reputation for reliability and degree of decentralization has long been validated by known DEXs such as Curve.
O3 Interchange is highly scalable and secure in a simple way because of its parallel NPAPs and DEX aggregation. As soon as new NPAP liquidity pools are deployed on any EVM-compatible chain, cross-chain transactions with new assets on the new chain are supported automatically.
Each liquidity pool is made up of token and ptoken, and their exchange rate is continuously changing with cross-chain trades. When a liquidity provider adds both the token and the ptoken to the pool at the same time, the pool maintains balanced. Thus, the LP will receive more LP tokens to earn more rewards. When the provided liquidity tips over the balance between the ratio of the token and the ptoken, the LP will receive less LP token.
PTMCs (Cross-chain soft asset management contract) is made up of relay consensus networks management contracts on multi-chains operable protocol, Poly Network. It’s used to burn and mint the cross-chain asset on the source chain and the destination chain at the rate of 1:1 to realize the base level of instant bridging of the cross-chain soft asset with extraordinary efficiency and security.
pToken (O3 pegged token) is the cross-chain soft asset pegged(1:1) from its native token through the O3 protocol. As a medium, it enables the most basic cross-chain function. It’s not necessary for users to have any interactions with pTokens in a normal cross-chain transaction. The only scenarios a user will have to interact it is when performing Peg, Barter, or arbitrage in the Hub.
Pegging is the act of depositing native tokens into liquidity pools via liquidity entry chain in order to mint ptoken at the rate of 1:1. On the contrary, users can unpeg a ptoken via the liquidity entry chain in order to redeem the native tokens at the rate of 1:1. Ptoken will be burnt after redemption.
Barter is the on-chain swapping between token and ptoken in a liquidity pool. The exchange rate is influenced by the current ratio of token and ptoken.
A liquidity entry chain is designed for each asset liquidity as the only entrance for native tokens to peg and the only exit for cross-chain soft assets to unpeg. This is the liquidity conservation mechanism first introduced by O3 Interchange to ensure the native token and its corresponding cross-chain soft asset are balanced during settlement.
As cross-chain transactions take place, the ratio between trading pairs in the liquidity pool will fluctuate, instead of a perfect ratio of 1:1. The arbitrage mechanism not only incentivizes users to engage in arbitrary trades to profit, but also balances the ratio of trading pairs in every liquidity pool and chain, thus making the cross-chain transaction nearly frictionless. Assuming the quantity of X is much more than pX in a liquidity pool, users can peg X to pX at the rate of 1:1. Then, barter pX for more x in the same chain for the purpose of arbitrage.
In order to protect the $O3 token price, the total token incentives will be set to a fixed amount per year. The incentives of each liquidity pool will also be adjusting periodically according to its trading volume and governance votes to optimize the liquidity utilization rate and maximize the interests for liquidity providers.
Yes. After the O3 DAO launches, users can stake O3 token to earn the governance token, DAO3, which can be used for submitting proposals and voting. Meanwhile, O3 DAO will introduce the first-ever V2E (Vote to Earn) mechanism to encourage the participation for governance. This one-of-a-kind V2E mechanism is more sustainable and scalable than traditional single token staking. It brings users more economic incentives and a strong sense of belonging to O3 DAO Community.
The O3 token obtained through the incentive mechanism is locked. Users can collect and check the number of locked O3 tokens in the Vault. The locked O3 token can only be unlocked by staking the LP token by providing O3 trading pairs to the main DEX on each chain. The LP token for unlocking is reusable and valid as long as the liquidity remains in the DEX. Incentive locking mechanism can effectively protect the price of O3 token and the interest of liquidity providers and O3 owners.
All transaction fees will be continuously collected to the Treasury. O3 Labs will buy back and burn the circulating O3 in the market using the collected transaction fees to realize the deflation token mechanism.