Active users up 1000%
GarudaSwap, a new decentralized exchange, and yield farming project on Binance Smart Chain, has surged to impressive levels just days after its official launch. Within days the platform reached $23 million in TVL.
The new DEX launched on the 6th of May and is one of 52 news dapps listed on BSC. This number of new dapps is indicative of Binance Smart Chains’ aggressive mission toward DeFi supremacy.
In the last 24 hours over 3,400 unique active wallets have interacted with the GarudaSwap smart contracts generating an increase of over 1000%, or 17,000 transactions. The platform already has over $23 million locked into its farms and pools with the GARUDA token price at around $1.20 at the time of writing.
The observed surges have been caused by several catalysts. Recently, the hype surrounding dapps listed on BSC has been growing along with the number of users actively using Binance dapps for trading. For example, speculators are keen to find the next PancakeSwap protocol. Where we observed token prices rising from $0.50 on January 21 to almost $40 today.
Secondly, and as with all new yield farming protocols, the staking and farming percentages were the real draw. Interestingly, GarudaSwap accepts CAKE, the native token of the PancakeSwap platform. Users can stake CAKE to earn GARUDA in return with APY currently over 2,186%. Currently, all the staking options on Garuda offer over 2,000% APY. As always, the Garuda staking option is the most lucrative with an APY currently over 4,000%.
The DEX has gathered impressive launch numbers but the true test will be in its longevity and whether it can now retain these uses and avoid the price of the token plummeting. Something which has actually already occurred, sending waves through the Garuda telegram chat.
On the 8th of May, the price of the GARUDA token surged to over $9 after premiering at around $2.60. The surge was short-lived and almost immediately after hitting its ATH the token dropped down to under $1 and at the time of writing is around $1.20. It is highly likely that a big stack early adopter of GARUDA sold at the peak, as a result crushing the price due to its low market capitalization.
What is GarudaSwap?
Unlike other farms, in GarudaSwap each transfer of GARUDA must pay an 8% transfer tax. Approximately 90% of the transfer tax gets added back to the liquidity pool through the contract automatically to raise the GARUDA price continuously. And the liquidity will be locked and inaccessible. This is an innovative feature of GarudaSwap, combined with mechanics aimed at providing token holders long-term benefits.
Sky farming pools allow GARUDA holders to stake their GARUDA to earn other tokens. Two pools (BUSD & BNB) will be created by the dev team after launch, the 3% deposit fee will be used as rewards for GARUDA staking.
A 4% deposit fee will be charged when users enter staking on GarudaSwap, but 3% of this deposit fee will be redistributed to GARUDA holders in Sky farms to encourage holding. Additionally, a 1% deposit fee is sent to the dev team as a development fund.
Harvest lockup is a rewards lockup mechanism also utilized by platforms like PantherSwap and is used to limit the frequency of harvest. It is designed to prevent farming arbitrage bots from constantly harvesting and dumping like other farms before GarudaSwap. For example, the harvest lockup of the GARUDA-BUSD farm is 2 hours. It means that farmers who stake in the GARUDA-BUSD farm can only claim their rewards from farming every 2 hours.
Another interesting mechanic, also observed in other protocols such as PantherSwap, is the Anti Whale mechanism. Users who transfer more than 0.5% of the total supply will be rejected. So a big whale cannot dump the price immediately. As the total supply grows, this ratio will be reduced.