144% increase in transactions in the last 24 hours
Multichain token swapping platform Paraswap has been going from strength to strength over the last few weeks as the Polygon Network continues to shine. In the last 24 hours, the platform has recorded 10,640 transactions generating over $1.5 billion in volume.
The spike in activity doesn’t only come from more transactions, but more users find their way to ParaSwap as well. The number of unique active wallets interacting with the dapps smart contracts rose by over 25% to 1,850. In the past 30 days, the platform has seen a 425% increase in active user wallets, registering 23,310 wallets.
To gain a more complete picture, it is important to compare the Polygon version of the dapps metrics with that of the Ethereum and BSC versions. On the Ethereum platform, we see that the amount of value is far smaller than that on Polygon. Additionally, the number of active users and transactions is far lower on Ethereum. On the Binance Smart Chain platform, we see considerably less activity than on both Ethereum and Polygon.
This is contrary to an earlier article looking at the same metrics published very early into Paraswap launching on Polygon and BSC. What we have observed is that users have left the Ethereum version of the dapp and are favoring the Polygon iteration. Presumably due to lower fees. ParaSwap stands out amongst the DeFi dapps currently on offer as it has introduced a different user experience to many of the copy and paste applications we have seen lately. The platform also boasts cheaper fees for Ethereum transactions than Uniswap and allows users to flick seamlessly between chains.
One major driver of this activity has been the introduction of the platforms REDUX token. A so-called ‘gas refund token’ REDUX is a new type of gas token and part of the new ParaSwap version: P4. It allows users to reduce gas spending by up to 50%. This ERC20-standard gas token can be used on ParaSwap but also any dapp built on the Ethereum blockchain. REDUX is a fork of GST2 and introduces two key optimizations: it’s cheaper to mint and cheaper to burn.
The EVM (Ethereum Virtual Machine) encourages its users to free up storage to reduce the blockchain size. However, accumulating data can become problematic: more data needs more storage. That results in higher costs and bigger nodes. Moreover, since it will be too costly to run bigger nodes, this situation can cause the network’s centralization.
One possible relief is creating Ethereum gas tokens, which can use the “storage refund” feature on the Ethereum blockchain. It’s a win-win situation. On one side, users can optimize their gas costs. On the other side, Ethereum optimizes its data storage. With the help of gas tokens, its permanently saved data will get freed up and this will prevent the network’s storage from getting too heavy. REDUX takes advantage of this feature by tokenizing refunds. Users can mint REDUX when the gas price is cheap and burn it when the price is high.
How to use REDUX on ParaSwap
Step 1: Go to ParaSwap.io, then click on connect wallet and choose your preferred one:
Step 2: Click on Global Settings (top right) then “Activate REDUX”
Step 3: Once you have activated REDUX, an “UNLOCK REDUX” will appear. Simply click “UNLOCK REDUX” so you can unlock it, like any other ERC20 token.
Step 4: Once unlocked, you should be able to mint the amount that you need. So simply click on “Confirm” to validate the operation.
Final result: Your REDUX is now displayed in your REDUX Balance. You can now use it (burn it) on any of your future transactions.
Gas Tokens are not an investment. Their purpose is a simple practical one, they aren’t meant to be held or sold for profits. Also please remember that all gas tokens might be discontinued in July 2021 if the EIP-3298 passes. Furthermore, by default, nobody should control their cost. ParaSwap’s gas token — REDUX isn’t controlled by ParaSwap. Importantly, cheaper gas can not be guaranteed just by minting gas tokens. It’s up to you to understand how it works and to do the maths when you plan on using it.