Welcome to the interview with Sameep Singhania, the co-founder of QuickSwap. QuickSwap is a layer-2 AMM DEX built on the Polygon Network. It circumvents the problems of network congestion, slow transaction rates, and high transaction costs that plague popular layer-1 DEXs, providing users with a superior experience.
Join us as we discuss layer-2 architecture, AMM DEXs, and the future of DeFi.
Hi Sameep. Thank you for your time. Please tell us your story and how the idea for QuickSwap came about.
Hi. I am Sameep Singhania, the co-founder of QuickSwap. Thank you for having me on board.
I began my professional programming journey as a software developer in 2013. Though I had the opportunity of working on some super exciting projects, I wanted to take my career a step further. The growing interest in blockchain technology caught my attention. And in 2017, I left my full-time job to become a freelance developer, building smart contracts and tokens for emerging blockchain businesses.
During this time, I was fortunate enough to land a project with OpenBazaar, a decentralized online marketplace. I also worked closely with Polygon’s core team, helping with its development. These projects offered me the much-needed experience and exposure to jump into DeFi.
In the subsequent years, I intently observed the rise of DeFi and the emergence of AMM DEXs like Uniswap. The market needed DEXs, and the ones that arose fulfilled that need. But the rising gas prices and network congestion on Ethereum posed a significant threat to the utility and efficiency of these DEXs. That’s where the idea of QuickSwap came from.
We wanted to create a layer-2 AMM DEX that could alleviate the existing problems and provide the user experience that was promised initially.
Okay! Diving right into it, what does it mean to be a layer-2 DEX. How are layer-2 DEXs fundamentally different from layer-1 DEXs?
Layer-2 DEXs are built on layer-2 blockchain networks, as the name suggests. Now, layer-2 blockchain networks themselves are built on top of layer-1 mainnet to increase their usability and scalability. The capabilities of the mainnet don’t limit these DEXs, which is where they differ fundamentally from layer-1 DEXs.
So, for instance, consider a DEX like Uniswap. It is affected by the network congestion, high transaction costs, and scalability of Ethereum. On the contrary, Ethereum’s shortcomings do not affect a layer-2 DEX like QuickSwap.
Layer-2 DEXs witnessed an incredible surge in total volume locked, number of users, and revenue in the past couple of years. What significant changes can a user undergoing the transition from a layer-1 to a layer-2 DEX like QuickSwap notice?
Users transitioning from layer-1 to layer-2 DEX can see significant user-experience improvements. DEXs like QuickSwap are highly scalable, so transactions are processed almost instantly and operate at a fraction of the cost. For reference, a fast transaction can cost up to $40 or higher with Uniswap. But the same transaction, with an even faster processing rate, costs only $0.001 on QuickSwap.
Users can thus bypass Ethereum’s gas fees and network congestion despite trading and swapping on the network. Moreover, layer-2 DEXs like QuickSwap are the key to interoperability in DeFi. They can be easily integrated with other blockchains and facilitate cross-chain interactions.
That’s a great insight. So, QuickSwap is built on the Polygon Network, which is a layer-2 scalability solution. How are networks like Polygon leveling up the blockchain space? Or do you think they complicate the blockchain architecture with additional layers?
The Polygon network emerged at a time when network congestion was crippling the Ethereum mainnet. It provided the ultimate scalability solution to the network. As a layer-2 solution, Polygon alleviated the existing problems without compromising security on the Ethereum mainchain. So, in this context, layer-2 solutions actually simplify the blockchain ecosystem by eliminating the necessity for numerous distinct blockchain networks.
I mean, why construct a whole new blockchain when you can take advantage of the existing network’s strength and improve it? Consider the Ethereum ecosystem, which is brimming with millions of users and cutting-edge projects. If we construct a new blockchain network to fix Ethereum’s flaws, the existing ecosystem would be lost. And this is where layer-2 solutions really shine.
They recognize the existing chain’s potential and problems, and solve them to improve the overall experience. This facilitates the creation of next-generation financial tools, NFT marketplaces, and blockchain-based games that are uniquely poised to benefit from this infrastructure.
Data shows that DeFi is among the fastest-growing sectors globally. Yet, it still pales out when compared to the traditional financial system. What are the major problems plaguing the DeFi space today and how can this gap between TradFi and DeFi be bridged?
To bridge the gap between TradFi and DeFi, we need to bring universal appeal to DeFi’s financial products. As of now, the DeFi industry caters to the demographic that has a higher risk appetite. Risk-averse investors looking for steady income growth are unfortunately left out of the DeFi revolution because of high volatility.
Moreover, to obtain loans in DeFi, borrowers need to over-collateralize and pay a floating interest rate. This unpredictability with floating interest rates deters borrowers. It also deters lenders who are looking for predictable yields on their assets.
Then, there’s also the issue of lack of liquidity for staked assets. Once users stake assets on protocols, they are locked for a duration when users cannot capitalize on other opportunities in DeFi. So, I believe that bringing TradFi products like index funds that reduce the overall risk exposure can create universal appeal in DeFi.
Along with this, protocols also need to focus on fixed interest rate lending and borrowing and creating utility for staked assets. Solving these problems could be key to DeFi’s future as an industry.
Lastly, what advice would you give to new investors, or traders entering DeFi? Why do you think they should make the transition?
DeFi, though still in its infancy, gives investors a fantastic opportunity to access various new asset classes and profit from their impending growth. However, the DeFi business is also rife with scam enterprises and get-rich-quick schemes that have little long-term value.
My advice to new investors is to conduct an extensive study before investing in a project. I’d also ask them to begin with bigger projects, especially those building infrastructure for Web3, rather than direct-to-consumer services. This will lower their risk exposure and allow them to seize profit from this growing sector. And after all, profit is what we’re all running after. Isn’t it?