FAQ
General
What is GnoSwap?
GnoSwap is the first decentralized exchange built on Gnoland using Gnolang. More specifically, GnoSwap is an automated market maker (AMM) protocol with concentrated liquidity, which enables higher capital efficiency for liquidity providers and unparalleled depths of liquidity for traders.
How do Automated Market Makers work?
Automated Market Makers (AMMs) utilize a mathematical equation to determine the exchange rate or price of assets in a pool relative to their quantities. As trades occur, the token amounts in the pool shift, causing a change in the price.
What types of tokens are supported on GnoSwap?
Upon launch, GnoSwap supports Gnoland-native tokens and GRC-20s. In the future, all assets from external chains transferred to Gnoland via IBC will be supported on GnoSwap. This is made possible thanks to the interoperable nature of Gnoland.
What can I do with $GNS tokens?
$GNS is the native token of the GnoSwap protocol, which exists to drive its ecosystem and encourage sustainable liquidity. $GNS tokens can be staked to earn xGNS, which represents the voting power on the GnoSwap governance. xGNS tokens receive a portion of all protocol fees generated on GnoSwap.
How do I check my transaction history on GnoSwap?
Once you connect your wallet, click on the notification icon next to your account address. A full list of your interactions with GnoSwap will appear. For transactions made outside of Gnoscan, please visit your account details page on Gnoscan.
How do I report a bug?
If you've found a bug, please email us at gnoswaplabs@gmail.com or create an issue on our official Github Repository. We will investigate your issue as soon as possible.
Trading
What does slippage mean?
Trades on GnoSwap are executed on-chain, meaning that it takes a few seconds for the Gnoland blockchain to process your trade after you submit your transaction. During a volatile market, the actual amount of tokens you end up receiving may vary due to price fluctuations. This phenomenon is known as slippage. You can prevent this by manually setting your slippage tolerance.
What is the Auto Router and how does it work?
The Auto Router runs a simulation through all available pools on GnoSwap to find the optimal route of the trade that returns the most amount of tokens for your trade. The less liquidity a pair has, the more likely that you'll see your trade getting split across multiple pools.
Why does my transaction keep failing?
The most common case of a swap transaction failure happens due to the slippage limit being reached. You may run into these issues when trading a large amount of tokens in an illiquid pool. Try to increase your slippage limit using the Settings icon and try again. If this issue continues, please ask for support in the GnoSwap Discord.
Concentrated LP
How does concentrated liquidity work?
Concentrated liquidity is a mechanism that enables liquidity providers to select a specific price range in which their deposits become available for trading. Rational LPs are expected to select a price range where trading is most active to maximize the fees they receive as rewards.
For more information about concentrated liquidity, click on this link to visit the relevant section which explains its mechanism in detail.
How are preset price ranges configured?
GnoSwap offers 2 preset price ranges for inexperienced liquidity providers.
Active: An aggressive price range of [-10% ~ +10%] for higher risks & returns.
Passive: A passive price range of [-50% ~ +100%] for moderate risks & returns.
Although thinner price ranges will result in higher rewards thanks to increased capital efficiency via liquidity concentration, they will require more frequent rebalancing, as out-of-range positions will not accrue any rewards.
What happens to out-of-range positions?
Once the current price of the pool crosses beyond the price range of your position, it means that one side of your liquidity has been completely used up. Your position will only be composed of a single token and will not accrue any rewards. Once this happens, you can either wait for the price to return to your range, or manually rebalance it by removing the liquidity and creating a new position.
Earning Rewards
Where do rewards come from?
There are three sources of rewards for liquidity providers:
Trading Fee Rewards: Traders who swap tokens from pools pay a portion of their trades as a fee. These fees are collected by each pool and distributed to liquidity providers pro-rata to their liquidity shares.
Liquidity Mining Rewards: Gnoswap distributes $GNS rewards to liquidity mining pools to incentivize long-term liquidity provision.
External Rewards: Gnoswap enables anyone to add rewards to the liquidity mining pools to bootstrap initial liquidity for nascent pools.
Are there any risks to providing liquidity on pools?
Liquidity providers may encounter a phenomenon known as impermanent loss (IL), which is a decrease in the net worth of a position compared to the initial deposit. The AMM is designed to keep the value of both tokens in a pool proportional to the market price. However, if one token's price changes, the pool may have more of that token, which has decreased in value, and less of the other token, which has increased in value. Trading fees and liquidity mining rewards exist to offset these ILs.
Why are there various fee tiers available on GnoSwap?
Most traditional AMMs with evenly distributed liquidity only supported a single fee type, as having multiple pools for a single pair led to severe liquidity fragmentations, resulting in high slippage and price impacts. The concentrated liquidity mechanism paired with the auto-router contract negates these issues, which enables GnoSwap to offer flexibility and customizability with fee tiers to the market. For example, liquidity providers of highly volatile pairs will likely choose higher fee tiers to compensate for the high IL, while those of stable pairs will choose a lower fee tier to compete with other liquidity sources for trading volume while being relatively free from IL.
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