What is Spectrum Finance and Why is it Important?
Spectrum Finance (formerly known as ErgoDex) is a decentralized exchange (DEX) on top of the Ergo blockchain. With Spectrum Finance, people can connect their Ergo wallet to execute swaps with $ERG and other Ergo native assets - all without the need to divulge KYC information. One key benefit of this DEX is the increased security it offers compared to centralized exchanges. When using a centralized exchange (CEX), users must trust the exchange to securely hold their funds and execute trades accurately. With a DEX however, users have complete control over their funds, as they are stored in their own wallets, and trades take place directly on the blockchain via open source smart contracts. In an industry where entities such as FTX, Celsius and Voyager (all CEX’s) proved to be untrustworthy, a DEX like Spectrum Finance promotes trustless and self-custodial DeFi. All token swaps are transparent and publicly available on Ergo Explorer.
What is Spectrum Finance Hoping to Achieve?
Spectrum Finance is building the infrastructure to facilitate cross-chain swaps between the Ergo and Cardano blockchains. As of March 1, the team posted the following graphic on their medium page showcasing the progress they have made over the previous months. As one can see, Cardano mainnet launch is well on its way.
SPF IDO on Ergopad
Spectrum Finance has also just completed an IDO hosted by Ergo’s primary launchpad (Ergopad) in an attempt to distribute their token. On the DEX’s main website, eligible users can already start claiming their free SPF tokens.
One can do this at the top of the page as indicated below.
The SPF token is currently for sale on Spectrum Finance’s DEX and yield farming is expected in the near future. Additional details, including the tokenomics of their IDO can be found here and in the graphic below.
As we approach the launch of Rosen Bridge, it’s important to note the depth of projects that are building cross-chain functionality on Ergo. As with Rosen Bridge, the Spectrum Finance team aims to develop a network that will enable users access to DeFi tooling across several blockchains. Although Cardano will be the first cross-chain option on their network, Spectrum Finance plans to develop a cross-chain DEX on numerous blockchains, including Ethereum, Binance Smart Chain, and Algorand, to name a few.
Although markets have been down for a while now, innovation and development on Ergo has continued at a strong pace. Discussions around price action are an exciting topic within crypto communities. However, it can be argued that a more important discussion should be focused on the security, functionality, and cross-chain interoperability of a blockchain. Developers on Ergo have continued to work hard, and the network is now poised to lead the charge towards safe and secure interoperability in the future.