A DEX on the EVM compatible Milkomeda sidechain. Enabling users to trade their ADA for tokens from the Ethereum blockchain.
The MilkySwap DEX, on the Milkomeda sidechain, is an Automated Market Maker, AMM, style DEX that allows liquidity providers to stake their LP tokens to earn the platform's MILKY token. These can then be locked to earn the platform's governance token, CREAMY.
Milkomeda and MilkADA - MilkySwap and MILKY Token
MilkySwap is on the Milkomeda sidechain, who’s base asset is MilkADA. MilkADA should not be confused for MilkySwaps token MILKY.
MilkADA is required for paying fees and gas on the Milkomeda sidechain. There is a well laid out walk through on how to mint MilkADA in the MilkySwap’s Gitbook documentation.
The MILKY token is earned by Liquidity Providers when they stake their LP tokens to the protocol.
The only wallet compatible with Milkomeda is MetaMask. dcSpark are working on adding EVM support to their Flint wallet, allowing users to do everything on the Milkomeda sidechain from one wallet.
Adjustable Transaction Parameters
Transaction parameters i.e. slippage and the time given for the transaction to complete, are preset but can be adjusted by the user if they wish. There is also an “Expert Mode” that can be toggled, allowing users to set a higher slippage for their trades and also allowing them to select a recipient of the trade other than themselves (the swapper).
There is a 0.3% transaction fee each trade performed on the DEX.
Providing Liquidity, Farming, and Locking
Users can provide liquidity to specific pair on the protocol by depositing their tokens to the protocol. In return they receive LP tokens that represent their ownership stake of that liqudity pool. These tokens can be redeemed at anytime for the initial liquidity that the liquidity provider contributed, along with the fees that they have earned in the time that their liquidity was in the protocol.
LPs receive 0.25% (83%) of the fees from all trades associated with their pool. It is not stated where the other 0.05% of fees goes.
LP tokens can be staked to earn MILKY tokens. There are no fees for staking or withdrawing LP tokens from the staking mechanism, besides the gas fees associated with these transactions. MILKY tokens can be harvested at any time.
MLIKY tokens can be locked for a fixed amount of time (between 1 week and 4 years). This is done on the “Churn” page of the website. In return for locking their tokens the user will receives the platform’s governance token, CREAMY.
Users have to pay the associated gas fees for locking and unlocking their tokens.
The MilkySwap team is completely anonymous. They say they’ve been developing in DeFi for a long time however they do not back this statement up with any concrete evidence.