MeowSwap

A DEX proposing a layer 2 solution to remove computational work from the main chain to significantly increase transaction speed.

MeowSwap kind of came out of left field, hosting an IDO on the Occam.fi platform then releasing their MVP soon after. Their initial documentation left quite a bit to be desired regarding the more technical details of how their “propriety” layer 2 solution was going to work. Because of how novel this was, along with some other red flags that will be mentioned later, this all pricked up some scam hunters’ ears.

Layer 2 Claims

The “proprietary” layer 2 solution has been under development for “four months” by a team from the founder’s other company #metahash which itself claims to be Blockchain 4.0. This layer 2 solution is alluded many times in the yellow paper but a detailed description was not overly forthcoming. A blog post, released in the middle of January provides more detail as to how this layer 2 solution will function.

In a blog post in December 2021 they complained that there was no chain out there where they can "implement everything that we have in mind”. It is not clear what this is in reference too, but, are they not the developer’s of a blockchain 4.0 with a supposed huge TPS, transactions per second, throughput? Why aren't they implementing their solution there?

Live App

MeowSwap does offer a live exchange through the MVP on their site but currently uses can only exchange ADA for the platform’s MEOW tokens, or vice-versa. here are no other swaps available, so it’s more of a token sale than an operational DEX at this point. It does however have Nami and GeroWallet integrations already with CardWallet integrations “Coming Soon”.

A Pro version of MeowSwap is also listed, boasting a price chart for MEOW tokens, viewable across multiple time periods. Users of the Pro version can also set their slippage limit, as a percentage, and and transaction execution time limit. There is also a list featuring all of the transactions conducted on the platform available for users to view and explore.

Initially Short on Detail

The yellow paper is short, as can be expected from a yellow paper, but without offering the technical details expected of a yellow paper. Of 5 pages 3 are devoted to price calculation, in a method that is fairly familiar to those used to reading these technical elements of DEXs. The novel L2 solution are not delved into in too much detail, covering what totals around half a page of the 5 page yellow paper. In this half a page they do provide some insight into how the layer 2 solution will supposedly function, via a proof-of-stake set of nodes governed by a DAO (but this is the only place a DAO is mentioned in the whole yellow paper).

In this yellow paper they node towards the release of multiple other instruments such as perpetual contracts, programable trading scripts, postponed executions, and copy trading scenarios.

A medium post was published in early December purportedly offering a “deep dive” into their “cutting-edge technology” however it is a word for word copy of the yellow paper and offers no extra details.

In a previously mentioned blog post regarding more detail, it is said that the layer 2 is up and running, that the nodes in it essentially work as Cardano oracles, and a diagram show how it will function. The blog post is here for those that are interested. It is worth noting that in the yellow paper it was said that this whole layer 2 process would be totally transparent to whomever wants to view it, however this does not seem to be possible at the moment. They also say their method can lead to enhanced decentralization with other users running these layer 2 nodes. The when of this is, again, not delved into in detail.

They have said that before they open pool creation, liquidity addition, and taking functionality they will publish their layer 2 multisig contract and the audit. We don’t know exactly who is doing the audit, the only details that is given is “multiple security companies such as H-K Technologies.”

The Team

The team consists of a Founder, a Software Engineer and an Advisor. None of whom mention MeowSwap on their linked socials. Specifically, the developer has been on Twitter for over 10 years yet is only following 23 people and is only followed by 5.

The above detail is from their one pager, but, in a previously mentioned blog post, they boast about a team of 9 members and 3 advisors, the majority of whom formerly worked for the Founder’s other company, the aforementioned #metahash.

First DEX Claims?

They are claiming to be the first DEX on Cardano. However, it is common knowledge that MuesliSwap were the first exchange live on the Cardano mainnet. Starting off with such a lie is not a good sign and can be seen as a marketing gimmick to draw people in. This is specifically why we don’t allow the use of the adjective “first” to describe a project on Built on Cardano because it can detract from the project itself.

Is it Real?

Saying you’ve developed a layer 2 solution and loosely laying it out, then saying no blockchain has the ability to implement everything you want to do (when you have developed your own network) is a little discombobulated.

This and a lack of initial data on this “proprietary” layer 2 solution doesn’t add up too well, along with claims that they were the first DEX on Cardano when they were not. Their documentation, a yellow paper and one pager, are stored on the DocSend platform and require entering an email to access to access them. This fact made some people wary of them seeing as this has never been the case with any other platform’s documentation in this space (and this writer has accessed and read well over 100 white paper, yellow papers, one pagers, pitch decks, and technical documents and never remembers having to enter details to access them).

On the flipside, they have continued to release, be it slowly, documentation detailing how the platform will work and have added functionalities to the platform. They have also been endorsed by Occam.fi and the investors on there who participated in the IDO and COTI have also partnered with them so they can implement the Djed stable coin. It is thought, in good faith, that one of these actors would have done their due diligence on MeowSwap before partnering with them but, as always, DYOR before participating in anything.

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Glossary

Oracle

In the ancient world oracles were people through whom the Gods spoke directly to the inhabitants of earth. In the blockchain and crypto world oracles are a service that provides off-chain data to smart contracts running on a blockchain.

On-chain functions, i.e. smart contracts, cannot access real world data on their own. This is problematic when a smart contract is trying to provide the real-time price of financial assets to users, or when it needs to determine the outcome of a sporting event for a gambling protocol, or even when it has been asked to use something measurable in the real world, such as the temperature or quantity of snowfall, in its calculations. Oracles can feed any real world data onto the blockchain for use by smart contracts.

Data is collect it in a variety of ways: APIs, websites, sensors, etc, and can be manual input by humans. This data is collect by nodes and is then passed on to the oracle service that then supplies the smart contract with the data. Having one node supplying data means a central point of failure, and a high potential for manipulation of the data. As a result oracle services usually use a network of nodes to build a consensus of the correct data point and to prevent the data from being manipulated, thereby helping to ensure trust in the data they supply.

DEX

Here is a Cardano DEX list for you to explore all the decentralized exchanges built on Cardano. There are multiple Cardano DEX projects for you to choose from, each with a different take on the DEX concept and the way of managing a decentralized exchange protocol.

Listed here are Cardano DEX projects that are based on both the automated market maker (AMM) and the traditional order book style of exchange. Both types of DEX on Cardano, like any other exchange, require a good amount of liquidity to operate effectively. This leads many to say that the best Cardano DEX is the one with the most liquidity. However, there are many other factors that the users of these DEXes would tell you to take into account before deciding which is the best Cardano DEX, and which one you should interact with (although a high amount of liquidity is a good indicator for users).

Interestingly, many Cardano exchanges, such as Sundaeswap, use the concept of “batchers” to collect, order, and execute transactions. This reliance on a small group of batchers to order and execute user transactions reduces the decentralized nature these exchanges as these entities could easily collude to front run transactions from particular wallets or to censor transactions from other wallets.

DAO

If a project on Cardano operates with a DAO that you’ll find it tagged and listed on this page. All of these Cardano DAO projects have, in some form or another, incorporated or plan to incorporate a DAO. Not all of them will be full autonomous and this may be for one of many reasons, be it that features are being released gradually, that they will never actually be a full and proper DAO (and this a debate for another time).

There are specific Cardano DAO projects listed here, and these are those that operate as a full DAO, who’s direction is guided by the votes of its members. Others on here are projects and protocols built on Cardano, and these can take various forms, including: DeFi projects, NFT projects, and gaming projects.

Regarding full Cardano DAO projects, these have been created around many different topics, the most popular being Cardano investment DAOs that invest in Cardano NFTs and tokens. However, there are other DAOs focused around things such as the development of open-sourced tooling, the growth of the DAO idea itself, and art.

Audit

Audits are incredibly important in the decentralized and blockchain world and audits are completed on a platforms code, typically by 3rd parties, to ensure that that code is as watertight as possible. Conducting audits before releasing product is a best practice technique and can expose flaws in a protocol before that protocol is released to the public, allowing developers to fix them so that they cannot be exploited by hackers.

When we run on the mantra that “Code is law” then that code needs to be secure so that everyone can be sure that their tokens are safe in the protocols and platforms they’re using. The projects tagged with audit are those that offer or conduct audits on platforms and projects in this space.