The Blueshift DEX Product Outline: 4 Major Uses of the Advanced Decentralized Exchange
Three things come to mind when faced with the question “What is Blueshift?”
Put together, Blueshift is all of the above only, it is an evolved version with upgraded features.
Blueshift is an improved model of DeFi with innovations that reinvent the features of a DEX, AMM, method of liquidity provision, etc.
But before I talk extensively about Blueshift and its uses, let’s understand the basics that make the protocol what it is.
What is Decentralized Finance (DeFi)?
Decentralized Finance, shortened as DeFi, refers to financial services that are provided on a blockchain, just as we have in traditional finance. But this time, these financial services have no central control over making all the decisions. Power is in the hands of the community.
Decentralized finance is unique and although it has the core elements of centralized finance, it is a hybrid of this sector, because it takes away the need for intermediaries, replacing them with smart contracts that affect transactions on command.
DeFi has become one of the most popular sectors of blockchain being the first to give utility to the Web3 industry, as a whole. Since DeFi technically involves all financial activities and transactions on every chain, the place of the sector cannot be undervalued.
One very crucial part of DeFi is Decentralized Exchange or DEX. Blueshift is paramountly a DEX.
What is a Decentralized Exchange (DEX)?
You already understand the concept behind decentralization, so you must know that decentralized exchanges are crypto marketplaces where cryptocurrencies and assets are either bought or sold.
These are not centralized exchanges (CEXs) that require KYC. DEXs are non-custodial and users stay in control of their private keys when interacting with them.
Because there is no central control, the technology applied for transaction execution and records is smart contracts, which are configured to carry out commands on set conditions and fill them into the blockchain.
DEXs have different models they follow. Popularly, we have the Automated Market Maker (AMM) and the Orderbook style.
Blueshift DEX is a high-breed AMM DEX.
What is Automated Market Maker (AMM)?
AMMs govern the liquidity flow in an exchange by allowing users to trade digital assets in an automatic and permissionless way through Liquidity Pools instead of the traditional method of buyers and sellers.
So, instead of buying and selling assets in the traditional exchange method, users (liquidity providers) provide these liquidity pools with their assets/tokens in a dual pool, the prices of these assets are determined by a pre-defined/fixed mathematical formula (ratio).
Blueshift: The High Breed of DeFi, DEX, and AMM
Blueshift is a DeFi protocol that provides its services more uniquely and innovatively not seen in other ecosystems. Taking a paradigm shift, the DEX reinvents its AMM model.
Instead of liquidity pair pools (containing only 2 tokens in a pool for users to provide liquidity), Blueshift uses liquidity portfolio pools (containing more than 2 assets that users can provide liquidity).
Also, where other DEX AMMs require their liquidity providers to provide liquidity to both tokens in a pool, Blueshift enables single-asset liquidity provisioning — users can provide only 1 token to a liquidity portfolio.
There is also the provision of virtual pairs, internal pricing oracles, decentralized autonomous organization-based portfolio management, and more.
The advanced AMM model Blueshift uses offers users top-tier crypto asset management technologies based on liquidity portfolios, where liquidity providers and arbitrageurs can ultimately benefit from providing liquidity to decentralized and community-based portfolios which reduces impermanent loss significantly compared to other DEXs.
These users can also enjoy zero fees for arbitrage operations and there are high APRs even at lower risk. The advantages of Blueshift’s AMM model over others are endless.
Let’s that a look at the systems employed by Blueshift.
The Blueshift DEX AMM Systems: 4 Ways to Use the DEX.
As established earlier, Blueshift adopts liquidity portfolio pools instead of liquidity pair pools. The Portfolios are similar to Exchange-Traded Funds (ETFs). Each portfolio consists of the crypto assets of different projects and keeps track of the prices of all assets.
Each portfolio comprises: a base token and non-base tokens and the base token is what determines the prices of non-base tokens. However, the performance and value of the entire portfolio establish value in all of the pooling assets and not just a single pair.
The assets listed in each portfolio are managed by the Blueshift community of users. The community makes a list of acceptable tokens to be listed in a portfolio which is limited and this will prevent the risk of inflation in the portfolio with low-quality assets.
So, liquidity providers and arbitrageurs provide liquidity with one or more assets as they see fit and in return, they earn returns.
Built as a portfolio DEX, on Blueshift, portfolios are used for swapping instead of the conventional pairs. Every portfolio defines its set of token pairs and their exchange prices.
Using the virtual token pairs, pairs can be created across portfolios, so a user can swap between tokens that are on a portfolio or between tokens that are in different portfolios.
In swapping, there is a smart router provided by Blueshift to determine the most efficient price route to take for every swap.
On Blueshift, liquidity providers can stake their LP tokens from portfolios to earn $BLUE tokens, which are distributed at every block during farming.
Every portfolio has a farm and each farm has a different multiplier. Whatever the multiplier is, the amount of $BLUES to be rewarded will be multiplied by it. So a farm with a multiplier ×4 has 4 times the amount of $BLUES in the farm with ×1.
Let’s take for example Portfolio Farm A with a multiplier of ×1 has 500 $BLUES, Portfolio Farm B with a multiplier of ×3 will have 500 $BLUES × 3 = 1500 $BLUES
$BLUES are distributed to participants according to the amount of their staked LP tokens.
4. Yield Pools
In Blueshift Yield Pools, liquidity provides stake their $BLUES to earn $BLUES in return. There are 2 types of Yield Pools: The Manual BLUES pool and the Auto HODL BLUES pool.
After each block on the chain, 1 BLUES is distributed by the Blueshift Smart Minting System as a reward among all stakes in both pools. The exact amount of reward a pool receives depends on its APY (for the Auto pool) or it's APR (for the Manual pool).
Go here to start staking: https://app.blueshift.fi/#/staking
For more information and updates on Blueshift, follow all of its socials: https://linktr.ee/blueshift.finance