BNB Chain Spotlight: Wombat

Wombat is a multi-chain stableswap backed by Binance Labs, native on BNB Chain. Its innovative single-sided pool design allows users to swap stablecoins at minimal slippage and stake at maximum yield.

We recently caught up with the team to learn more about what they have been working on...

Q1: It’s great to be talking to you, Wombat Exchange. As this is your first time under the Spotlight, let’s start with a brief introduction. Tell us what you do and what’s unique about Wombat Exchange?

Thanks for having us! Wombat Exchange is made up of DeFi lovers. The team saw the problems of existing stableswaps, and we got fixated on finding solutions. After days and days of idealizing and deliberating, we believe we have found the answer to tackle them all. And that's how Wombat Exchange was born!

Wombat Exchange is a multi-chain stableswap that made a few things possible: single-side liquidity, minimal slippage, accurate calculations, and healthy and sustainable yield. The team has incorporated concepts from traditional finance, such as asset-liability management and coverage ratio. Now, users do not need a pair of tokens to start liquidity mining - just one stablecoin will do. We solved scaling and liquidity issues and provided end-users with an easy-to-use UI. Stableswap math can be complicated, but users shouldn't have difficulty using it.

Wombat is unique because it is a DeFi primitive. We are designed to be simple so that great projects can bloom on top of us and evolve together. The community can expect Wombat to have an entire ecosystem of projects that will build on top of us, which will add value not only to Wombat but to DeFi as a whole.

Q2: How did you come up with the name Wombat Exchange, and when was the whole idea born?

The team played with the idea of rare and extraordinary animals. Rare like a unicorn, well, except unicorn is not even real. We embrace the statistical rarity of what we do, and this hairy, short-legged, Australian-native cutie was the best reflection of who we are.

Firstly, wombats are super adaptable and habitat-tolerant animals. Our invariant pool design is super versatile, like wombats, and it's also tolerant of liquidity changes. The idea was born in the autumn of 2021, and we're very proud of where Wombat Exchange is today.

Q3: Can you briefly introduce us to your team? What’s your team's experience?

We're all DeFi loversssss. So Alex, our founder, was a quant trader and a blockchain engineer. Daniel, our CTO was an ETH ICO investor and a kickass software engineer. Raymond, our CMO, runs his own marketing firm that focuses on crypto. We believe in the philosophy of DeFi, and we dropped everything, rolled our sleeves up, and started building in this space. The future is bright, and we desire to contribute to the growth of this industry.

Q4: We’ve heard about Wombat being a stableswap 2.0. What is it, and how does it blend with your vision?

We're the first to be branded with the term Stableswap 2.0 on the BNB Chain because of the innovative breakthrough from the issues of conventional stableswaps. Current stableswaps have complex pool compositions, which is highly impractical due to the organic differences between stablecoins. We adopted a single-sided liquidity pool, a first on the BNB Chain, which made the pool composition much more efficient, eradicating scalability barriers.

Our implementation of Coverage Ratio from traditional finance made way for even lower slippage. Wombat's slippage improvement reaches up to 40% compared to its peers in the market.

As a stableswap 2.0, we're not just way more resilient; we're basically bulletproof. In the recent TerraUSD crash, many liquidity pools have been drained and left unhealthy. The Equilibrium Coverage Ratio is a strategy we use to manage risks and protect users' funds during disastrous events.

Moreover, an accurate calculation of a swap cost has always been just an approximation in other stableswaps. With Wombat, precise details are now available to users before proceeding with a transaction - thanks to the team's mathematical conviction. This elegant and efficient approach to stableswaps makes Wombat a potential Curve challenger - and a 2.0 version of it. As we enter the era of stableswap 2.0, DeFi users can expect a more robust ecosystem with new solutions to enhance its integrity, usability, and interoperability.

Q5: Can you tell us how Wombat’s ve-token model works and how users can profit from this system?

Apart from our Base Pool for liquidity mining, we also have the Boosting Pool. Current designs have a few issues: they penalize users who stake late, who stake little — but this is prejudicial, and we're here to change that. We noticed how Curve requires you to lock in for long periods that may be too long for retail, and Wombat wants to give that choice back to the users because we believe that the world of DeFi should offer the freedom of choice!

Incorporating the ve-token model incentivizes token purchases, encourages long-term investment, and develops a strong TVL directly linked to lock boosting. The team drew inspiration from Curve's veCRV hard lock model and enhanced its flexibility and earning power.

Our ve-token model allows users to lock from 7 days to 4 years. The longer you lock, the more you earn. Our community-driven team will create a new Convex/Olympus DAO-style, helping support voting and staking, ultimately adding value to Wombat token holders.

Q6: You have to protect a lot of funds and user data. What is your security strategy?

Undoubtedly, security is one of the main concerns for any DeFi user. In terms of smart contracts and codes, we have been audited by numerous reputable blockchain security firms, such as Zokyo, Peckshield, and Hacken, to ensure we're free from vulnerabilities.

We also partnered with Immunefi, the leading Web3 bug bounty platform, for the mass to participate in strengthening our defense.

Our primary goal is to keep the platform safe and protect our users at all costs. Very soon, Wombat users will have the opportunity to insure their assets for an extra layer of security.

Q7: Why did you decide to build on the BNB Chain?

Many of you may know that we were part of the Binance incubation labs. Binance saw potential in us when Wombat really was just an algorithm. Binance's trust in our project is a considerable boost, CZ has given great advice, and he is someone that genuinely wants DeFi to succeed. The Wombat team fills the glaring holes that the Binance ecosystem has.

We believe our excellent design and slippage, combined with BNB's low gas fees, will make a great alliance. For the end-users, we provide even better rates, which is the goal for teams pushing DeFi to the next level. Besides our skillset and devotion, we work together with the entire BNB chain ecosystem to ensure we grow together. We believe our existence will power the growth of the BNB chain.

Q8: Talk to us about your vision of Wombat’s ecosystem.

As Wombat continues to grow, one of our future objectives is to have an incubation platform to support newly developed DeFi projects. It's basically a lab to help projects maximize their potential and efficiency in synergizing with our protocol.

We'll provide a strong foundation and assistance to projects that want to build on top of us. These synergies will be very beneficial to not only our community but to the chain we're in and the entire DeFi ecosystem.

Q9: And as we’re getting to the end of the interview, let’s talk about the future. What do you see as the main challenge for the future of DeFi? What new features can we expect from you in the upcoming months?

Trust and understanding of DeFi are crucial, especially in the bear market. It is the best time to equip yourself with knowledge and be prepared for the future. We're trying our best to share knowledge with our users to understand the complexity, risk, and beauty of DeFi. We are seeing huge growth in adoption. As rapidly as it grows, many retail users still find DeFi hard to use.

We believe that sharing knowledge from reliable experts helps people make better decisions and take better actions. As adoption accelerates, we believe each individual should be well equipped to succeed and reap the good stuff DeFi brings to the world.

Soon, we'll be on our Full Launch. Every day, we work hard towards being the best stableswap in existence. In Q3-Q4 this year, we'll list more pegged assets while creating new pools to handle diverse risk levels.

We are also working hard on partnerships to achieve a multi-chain future.

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