On Thursday (January 20), Charles Hoskinson, Co-Founder and CEO of Input Output Global (IOG), the blockchain technology responsible for Cardano’s R&D, celebrated the mainnet launch of SundaeSwap, which calls itself “the sweetest decentralized exchange on Cardano”.
What Is SundaeSwap ($SUNDAE)?
SundaeSwap is “a native, scalable decentralized exchange and automated liquidity provision protocol”.
It is backed by cFund (“an early-stage sector agnostic venture firm in the Blockchain industry anchored by IOHK and managed by Wave Financial”); Alameda Research (the quantitative cryptocurrency trading firm and liquidity provider founded by FTX CEO Sam Bankman-Fried); and Double Peak Group (“a family office focused on investments in the digital asset and blockchain space”).
Here is why the SundaeSwap team decided to build a DEX on Cardano:
“… in simple terms Cardano is faster and cheaper than the alternative smart contract platforms. It also is run by a non-profit foundation and regularly collaborates with high profile academic institutions. All in all it is more advanced and a better option for future projects to be built upon.“
SundaeSwap’s Mainnet Launch
In a blog post published on January 7, SundaeSwap Labs, the startup behind SundaeSwap, started by telling fans that they could “expect a very exciting announcement in the next few days”, which has to be related to the upcoming mainnet launch (likely to occur later this month).
The SundaeSwap team then tried to set expectations of the Cardano community ahead of the launch of the Cardano-powered DEX on the mainnet.
They first pointed out that during their testnet launch event, they “noticed a large backlog in processing user actions”, which was “partially due to continued improvements to the Scooper order batching program, but was more due to the current maximum throughput parameters of the Cardano blockchain.”
Although they acknowledged that this is “likely to negatively impact the user experience,” they pointed out that “congestion is a sign of the Cardano network operating as intended by gradually applying backpressure.”
They then mentioned that as part of their discussions with IOG about protocol parameters, they “conducted a mainnet load test on December 18th.” They claimed that to — the best of their knowledge — “these are the first smart-contract backed automated market maker (AMM) transactions on Cardano mainnet.”
Here were some results from this test:
“Over the course of this 40-minute load test, a single SundaeSwap Scooper performed 139 scoops (i.e., transactions which aggregate many user operations), which is approximately 3 scoops a minute. This is lower than the roughly 7 scoops per minute we saw on the testnet.
“Additionally, due to lower protocol parameters on the mainnet compared to testnet, these scoops on average aggregated 3 user operations each. This is lower than the 5 to 8 operations we observed during SundaeSwap’s operation on the testnet.“
Although SundaeSwap Labs were not in a position to precisely predict what the load would be like in the first week of going live on the mainnet, they did remind the community of a few things:
- “There is a much lower barrier to entry compared to testnet; there’s no need to interact with a faucet, switch your wallet to testnet, etc.
- There is greater incentive to participate in the DEX to capitalize on its utility with real funds
- There is greater risk of participation since users are exposed to losses of real funds through trading activity
- The SundaeSwap DEX must share network bandwidth with other launching protocols, themselves driving additional network demand.“
Due to the huge amount of interest in the project from the Cardano community, the SundaeSwap team said they were expecting “a large backlog on mainnet as well” and wanted their users to be aware that although orders (including swapping, providing liquidity and withdrawing liquidity) might take days to process,” they could rest assured that “everybody’s orders will be processed fairly and in the order they were received and executable.” Furthermore, it would “be possible to cancel orders at any time before they are processed by the Scoopers.”
Finally, they mentioned that “while this demand surge would result in network congestion and longer order processing times,” they did not “expect this situation to last indefinitely” and that “eventually” the network would “catch up,” something which would be “further improved as IOG implements a planned series of improvements and enhancements to scale Cardano network capacity throughout 2022.”
Well, at 9:46 p.m. UTC on January 20, SundaeSwap Labs announced on Twitter that swapping had gone live on the mainnet version of SundaeSwap.
The first swap took place around 20 minutes later:
A few hours later, who is current visiting Austin, Texas, released a short video clip to show that he was celebrating the successful mainnet launch of SundaeSwap:
Of course, as soon as soon as the swapping went live, many SundaeSwap users started complaining about their failed transactions (which were due to network congestion) on SundaeSwap’s Discord and Telegram channels.
According to a report by Cointelegraph published earlier today, these complaints prompted SundaeSwap Labs CEO Mateen Motavaf to post a the following message:
“IF YOUR ORDER IS ON-CHAIN, IT WILL BE PROCESSED ORDERS ARE FAILING DUE TO CONGESTION, PLEASE BE PATIENT.“
Apparently, the SundaeSwap team hosted a Twitter Spaces AMA around 1 a.m. UTC to calm down some unhappy and impatient users.
Late yesterday, Tim Harrison, Marketing & Communications Director at IOG, had this to say about SundaeSwap:
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