The Unicorn Arrived. Uniswap Protocol Integration in Trust Wallet
The integration of the Uniswap protocol into the Trust Wallet mobile app means that the swap experience just got cheaper, quicker and a whole lot more interesting. It’s also opened up the possibility to integrate Pancake Swap to the app as well.
These changes mean:
Lower network fees for swaps
Smaller slippage when you trade
Better liquidity, and more assets to swap
This article is going to dig a little bit deeper into these benefits…
But first of all, a little bit of history
With its integration of the Kyber Network Protocol some months ago Trust Wallet gave its users the opportunity to make multiple decentralized swaps within the mobile app UI. Users have been able to freely transact and swap tokens, without the need to transfer the tokens from the wallet to an exchange and back to the wallet after the transactions have been executed.
What is Kyber Network Protocol
Kyber Network Protocol is an on-chain liquidity protocol that allows instant conversion and exchange of ERC20 digital assets in an order book-less interface with a large pool of token liquidity. The open architecture of Kyber Network protocol has been instrumental in propelling users’ access to liquidity and instant settlements in Trust Wallet.
Trust Wallet envisions a trustless and decentralized access to financial services for its users through a coherent and straightforward interface. The Integration of Kyber Network Protocol was just one of the many ways Trust Wallet drove this vision. Even at the time of integrating Kyber Network Protocol, Founder and CEO of Trust Wallet — Viktor Radchenko promised to integrate more projects and protocols into the ecosystem.
Recently, Uniswap protocol support has been added into the Trust Wallet mobile app’s swap. Uniswap Protocol certain advantages over Kyber Network Protocol which up till this point was the only swap option in Trust Wallet.
We will compare these two protocols on Trust wallet, but before that, let’s take a quick look at the history of Uniswap too.
What is the Uniswap Protocol?
Uniswap is a decentralized exchange that is built on Ethereum. It is an automated liquidity protocol with no order book or any centralized entity that controls trades. Users can trade on Uniswap without intermediaries, with a high degree of decentralization and censorship resistance. Uniswap is open-source software that works with a model that involves liquidity providers creating liquidity pools.
In 2016, Vitalik Buterin proposed an idea for a decentralized exchange that would employ an on-chain automated market maker with some ambitious characteristics. In 2017, Hayden Adams started working to turn this idea into a reality. With the help of the grants from different sources including $100,000 from the Ethereum foundation, Hayden launched Uniswap protocol in 2018 and in the same year, the protocol began to attract liquidity and gained meaningful volume.
Uniswap proffers solution to the problem of spreads being too wide, which is common with illiquid assets on the order books of exchanges. Uniswap maintains liquidity for it assets by encouraging liquidity providers with incentives. Liquidity providers on Uniswap receive part of the transaction fees that are realized from the pool they supplied.
What’s the big deal about Uniswap Protocol integration on Trust Wallet?
Uniswap integration in Trust Wallet comes with improved features such as less slippage, low transaction fees and the possibility of having more assets to swap.
Comparing Kyber Network with Uniswap in Trust Wallet based on theses features gives a clear understanding why the Trust Wallet team saw Uniswap as a better option.
Slippage is the difference between a trades expected price and the actual price at which the trade is executed. This usually occurs when there is high volatility in the market.
Slippage is inevitable in order book-less decentralized exchanges that use the decentralized pricing mechanism known as Automated Market Making (AMM). Looking at the maximum slippage on Kyber versus Uniswap, the later is clearly a better option than the former. Uniswap Protocol has a maximum slippage of 0.5% while Kyber network has 3% maximum slippage which is 6x that of Uniswap.
Lower network fees
Transaction fees are important factors traders consider before using any trading platform. Different platform charges different transaction fees on its platform. Sometimes, these fees can rise or drop as happened some weeks back when miner’s fees on Ethereum network rose significantly.
Different platforms charge transaction fees differently to their users. Currently, Uniswap charges lower transaction fees than Kyber. On Uniswap protocol, Trust Wallet users can now save $7.17 from transaction fee alone by paying a transaction fee as low as $2.27 instead of $9.44 that is charged on Kyber Network Protocol.
Please note, Trust Wallet does not charge any additional fees when you use the Trust Swap feature to make swaps on Uniswap. You pay the same as if you traded on Uniswap via the Trust Wallet DApp browser, or on your desktop.
Better Trading Results
Another important observation is that overall, swapping is more efficient with the Uniswap protocol integration, than on the old Kyber Network Protocol integration.
From the screenshots below, you will observe that swapping 0.1 ETH gave 2.226… UNI on Uniswap protocol while on Kyber Network Protocol, same 0.1 ETH can only get 2.219… UNI.
More assets in the future
When Kyber Network Protocol was the sole protocol for swap on Trust wallet, only assets on Kyber Network were available for swap. But, with the integration of Uniswap Protocol which hosts the majority of DeFi assets, Trust Wallet users will have access to many more assets to swap. In fact, it opened up the possibility to integrate Pancake Swap, and now there will be several Binance Smart Chain assets available to swap too.