Your daily briefing of some of the most important stories from the crypto, finance, and tech space.
Ruby is a gas-free AMM, and the leading decentralized exchange for the SKALE ecosystem.
Ruby is an AMM, and the leading decentralized exchange in the SKALE ecosystem. Thanks to a range of features, Ruby offers functionality that other DEXs cannot, and is well positioned both to contribute to and benefit from the liquidity moving into the SKALEVERSE as the network expands.
What Is An AMM?
The ability to exchange one crypto for another is critical for the DeFi space. Centralized exchanges, while popular, are not well suited to use within DeFi due to their frictions and single points of failure.
Early attempts to recreate the UX of traditional exchanges on the blockchain proved unsatisfactory. Automated Market Makers (AMMs) were a DeFi-native solution, providing a permissionless, trustless, secure way of trading tokens peer-to-peer, and avoiding all of the problems that prevent CEXs from being integrated with DeFi dApps.
Centralized exchanges work on the order book principle, where traders place buy and sell orders for specific amounts of coins at their target prices, allowing other traders to fill those orders. With an AMM, each trading pair has its own pool, and liquidity providers (LPs) contribute equal sums of each token. For instance, they might lock $1,000 worth of both ETH and USDC within the ETH-USDC pool. LPs receive trading fees and sometimes other yield farming rewards in return for providing liquidity.
As users buy and sell from these pools, an algorithm dynamically adjusts the token prices in each pool based on supply and demand, facilitating trustless trading for buyers and sellers alike.
AMMs have various benefits compared with CEXs:
- Security. There are no third parties. Users trade with a smart contract, rather than giving up control of their tokens.
- UX. Users receive a single price for the amount of crypto they want to trade, rather than needing to navigate order books.
- Liquidity. AMMs always have liquidity. There are no gaps or buy/sell walls.
- Community-run. Liquidity Providers collectively supply tokens for users to trade against, and are rewarded in proportion to the funds they stake.
- Composability. AMMs can be integrated easily into other DeFi services.
How Is Ruby Different?
Almost all of Ruby's unique features are enabled by its use of the SKALE Network.
Ruby is hosted on Europa, a SKALE Chain shared by a cluster of liquidity-focused dApps. SKALE's zero-gas infrastructure means that users can trade and farm on Ruby without the additional and unpredictable costs that plague users on Ethereum mainnet and even many L2 networks, and which make small transactions uneconomical.
SKALE provides built-in protection against front-running attacks at the network level, thanks to its use of threshold encryption for validators, which ensures that transactions cannot be viewed by attackers until they are confirmed on the blockchain.
Ruby is also able to make use of "gemstone" NFTs to provide upgraded functionality, including zero commission fee trades. SKALE supports decentralized file storage, so the metadata for NFTs can be held on-chain (rather than on IPFS or hosted storage, like most NFTs), and there is never a problem with data availability—which is vital for the "NFTification" of DeFi.
Finally, Ruby has worked hard to provide a clean, user-friendly interface that makes trading and LPing intuitive and easy.
What Can You Do On Ruby?
Ruby supports all of the activities provided by regular AMMs, plus some special features:
- Bridge tokens from Ethereum mainnet to the Europa SKALE Chain quickly and easily, for only the gas fee on Ethereum L1, using the decentralized SKALE IMA Bridge.
- Trade supported tokens with zero gas fees on the AMM.
- LP and earn a share of trading fees (0.3% per trade, 0.04% for stablecoin-to-stablecoin trades).
- Yield farm by locking LP tokens to earn RUBY rewards. Earnings are vested over three months, or can be accessed early for a 50% penalty fee.
- Stake RUBY for a share of trading fees, or lock tokens for three months to earn a share of 50% early-access farming penalty fees.
- Dollar-Cost Average (DCA) orders can be placed to drip funds into an asset over time, smoothing out the volatility of the crypto markets. Any amount can be spent at any interval (even $0.01 every minute), thanks to SKALE's zero-gas approach.
- Raffles are held for cash prizes, and are the main way in which gemstone NFTs are distributed.
Subscribe to our newsletter and follow us on Twitter.