Spectrum Finance is all set to go live on Cardano. However, it has released a note to highlight the importance of the launch. Spectrum Finance, Cardano AMM protocol, brings to the table the factors of openness, transparency, and decentralization. There are many more benefits that Spectrum Finance says will be added to the ecosystem of Cardano.
To begin with, Spectrum Finance has clarified that it will maintain the auditable code for transparency, making it one of the most trustworthy platforms. Spectrum Finance is expected to boost resilience by making sure that a decentralized off-chain execution happens.
Also, it will bring together the advantage of delivering a reliable solution and sporting a robust mechanism throughout the disruptions. The AMM protocol aims to bring down transaction fees. It just remains to be seen if the fee structure goes on to depend on the volume of transactions.
A total of three default functionalities are being carried forward by Spectrum Finance. These are deposit, swap, and redeem. Deposit brings liquidity provision to the pool of liquidity, while swap and redeem functionalities facilitate the exchange of digital assets and withdrawal of a portion from the pool, respectively.
To dig a little deeper into the fee structure of Spectrum Finance AMM protocol, the key benefit for users is that they gain access to a structure that delivers lower fees.
Different types of fees are expected to react differently. This means that the network fee that goes to validators in Cardano could be higher on some occasions. Spectrum Finance holds no control over it, and hence, fluctuations could be obvious.
Refundable ADA deposit appears as a fee only for some time, following which the same is given back to the users when they complete or cancel the transaction. Meaning it is not actually a fee but an amount that is held by the network to build on the transaction.
Execution Fees fall under the jurisdictions of operators. These are crucial if one wants to incentivize individuals on the network. Other types of fees are Fee Switch and Liquidity Provider Fees. User Interface Fee, which is often displayed as an additional fee to users, will not appear for the community of Spectrum Finance.
Spectrum Finance has developed TypeScript SDK, making it convenient for developers to access the protocol irrespective of frontends and the set of diverse applications they come across. Spectrum Finance has kept the doors open for the community to flag adversaries or critical issues. Such involvement will help them update the protocol and provide better offerings in the times to come.
More aspects to look forward to are Liquidity Bootstrapping and Airdrops. Spectrum Finance has sent out an invitation to everyone, asking them to add liquidity, create a liquidity pool, or swap native tokens.
Spectrum Finance has called the upcoming launch a new era in DeFi, adding that the protocol brings unparalleled benefits like an auditable codebase and accessibility. Spectrum Finance has further said that this is only the beginning of its journey, a hint that much more is on the roadmap.