DeFi
Bybit Learn
Bybit Learn
Intermediate
Mar 16, 2022

What Is SundaeSwap Token: ADA’s Biggest DEX, Reverse ISO and the Future of SUNDAE

SundaeSwap is an innovative decentralized finance protocol that was launched in early January 2022. As an important and widely anticipated addition to the Cardano (ADA) platform, the hype behind the development of SundaeSwap rallied ADA prices, thanks to high expectations and interest. The price of ADA, the native token of the Cardano platform, increased sharply due to excitement and anticipation of the new Cardano DEX and the initial stakepool offering (ISO). 

Using community governance, SundaeSwap carried out a Reverse ISO to ensure fairness among the staking pools. That said, for Cardano and DeFi beginners, you’re probably wondering what is SundaeSwap, as well as the tokenomics of SUNDAE, the governance token for SundaeSwap.

This article will cover the ISO and the startup phase obstacles, and we’ll review the SundaeSwap Reverse ISO. In addition, we’ll assess the SundaeSwap token and explore if SUNDAE is a good investment.

SundaeSwap's Origins and Promising Future

SundaeSwap is a decentralized exchange (DEX) operating on the Cardano blockchain, and is a scalable exchange protocol with automatic liquidity provision. Thanks to its native and scalable nature, the decentralized exchange has proven to become widely popular among the Cardano community.

The SundaeSwap protocol is defined by a series of immutable, permissionless, and decentralized smart contracts built on Cardano using Plutus, the smart contract programming language of the Cardano blockchain. Unlike traditional exchanges, SundaeSwap adopts a decentralized structure. This enables efficient cryptocurrency transactions designed to offer a superior user experience compared to traditional financial institutions. The DEX’s ambitious road map and continuous rolling out of features have put Cardano in a prominent position as an innovative and high-growth blockchain.

SUNDAE is the native SundaeSwap token, and the DEX is quite popular in the ADA community, reflecting a large social media following created during the development period. The on-chain governance model aligns with the Cardano community commitment to decentralization and community governance. The ISO also demonstrated the commitment to community governance, as the community itself voted and selected staking pool operators to participate in the incentivized distribution.

SundaeSwap's Origins and Promising Future

History wise, SundaeSwap began as an effort to utilize the decentralization features of Cardano and its ability to manage ERC20 programs and smart contracts. The young but experienced development team found strong operations and finance partners. Their effort to make the image an asset may be SundaeSwap’s most visible impact, and the reason SundaeSwap enjoys tremendous popularity in the Cardano community.

SundaeSwap has the best promotional effort of any Cardano DEX. Prior to the launch, the price of ADA rose because of the enthusiasm and optimism generated by the first smart contract-capable DEX on Cardano. The SundaeSwap ISO had an additional positive impact on the price of Cardano’s ADA. Cardano benefited in important ways from the addition of a fully functioning DEX, and the level of transactions on the platform rose sharply after the DEX and SundaeSwap token launch.

SundaeSwap also exemplifies the ownerless exchange model. In their recent Reverse ISO, the community voted to select pool operators to receive SundaeSwap token incentives, which attracted and rewarded liquidity providers. The community governance model is consistent with the Cardano platform goals. SundaeSwap may be the best Cardano DEX in terms of achieving an ownerless business ecosystem.

The launch of Sundae Swap on the Bitrue exchange indicated wide acceptance of the native SundaeSwap token, as Bitrue is a highly-regarded exchange. The selection of the SundaeSwap token is a credit to its management team, financial backers, and the Cardano platform.

While the DEX and SundaeSwap token are in full operation, there are lingering tasks, such as the unfinished development of the DEX functions, liquidity, and full community governance. The movement to self-governance through self-executing agreements won’t proceed until Cardano resolves capacity barriers on the size of smart contracts. The full operating protocols and liquidity are under development, and the movement to full self-governance will follow.

Now that we understand the basics of SundaeSwap and its origins, let’s dive deeper into what makes SundaeSwap and SUNDAE a good investment as the best Cardano DEX.

Is SundaeSwap the Best Cardano DEX?

There’s a solid argument in favor of SundaeSwap as the best Cardano DEX. SundaeSwap is the largest DEX on Cardano’s platform, with a 95 percent dominance. The SundaeSwap community is strong, engaged and enthusiastic, and the SUNDAE token works well as an incentive to hold onto thanks to its utility and future prospects as an investment. Large financial institutions think likewise, with the financial backing being especially strong from cFund, Alameda Research and Double Peak Group.

When asking if SUNDAE is a good investment, effective community governance is part of the answer. This can clearly be seen among the SundaeSwap community as they’re highly interested in community governance. An example of this can be seen in how the development team has created avenues for the passionate community to participate in the SundaeSwap Discord and discuss governance proposals in the Sundae DAO category. All of this represents a move towards complete DAO independence as the community takes charge of voting for protocol changes.

SundaeSwap offers some long-term upgrades and improvements for Cardano. Despite being the first Cardano DEX, it’s continually improving to be the best. The addition of smart contracts to SundaeSwap will be completed late in 2022, and this will enable community guidance through smart contract-controlled voting. The overall goal is to create an ownerless marketplace supporting direct engagement between community members.

With the passionate Cardano community and commitment towards advancing smart contracts in mind, the Cardano platform is certainly an ideal fit for SundaeSwap. However, this begs the question: how does SundaeSwap compare against its competitors. Read on to find out how it differs from popular Cardano DEX alternatives like ErgoDEX and ADAX.

SundaeSwap vs. ErgoDEX

ErgoDEX is a cross-chain exchange that offers liquidity between Ergo and Cardano where users can conveniently swap tokens on both blockchains. To keep transactions up to speed, Ergo uses an orderbook and some centralized off-chain processing. It’s worth noting that as a Proof of Work blockchain, ErgoDEX unfortunately consumes huge amounts of energy. ErgoDEX also offers a free and open marketplace with no intermediaries or permissions. Its peer-to-peer marketplace features order book and automatic market maker systems to perform transactions. While all these features sound confusing, ErgoDEX is a user-friendly system that showcases clear and intuitive interfaces.

When compared head-to-head, SundaeSwap has numerous advantages. On top of its previously mentioned financial backing, SundaeSwap has the environmentally conscious edge by working on a Proof of Stake protocol. By comparing operations, SundaeSwap works on a single blockchain and has less complexity than ErgoDEX while offering the same benefits of smart contracts, order book, and decentralized operations. This ultimately makes SundaeSwap the go-to choice for users desiring simplicity in their transactions.

SundaeSwap vs. ADAX

As a state-of-the-art DEX protocol, ADAX prides itself upon letting users take custody of their own assets. With minimal fees and rapid transactions, the DEX stands out from other automated liquidity providers by eliminating common tropes like order books so users can swap and trade as they please. ADAX traders can use a social sentiment trading tool that permits quick strategy changes when users sense trends and developments in the market.

While this peer-to-peer-like approach is appreciated, it also complicates matters as ADAX requires a complex movement and conversion process to migrate tokens on and off the platform. This once again draws comparisons to SundaeSwap, which boasts a simple and intuitive interface for users. ADAX focuses on establishing a professional and minimalist look whereas SundaeSwap uses a wide range of graphics and themes in its colorful interface.

SundaeSwap’s Reverse ISO — and How to Profit from It

SundaeSwap completed its ISO after their January 2022 launch. After the launch, SundaeSwap quickly became the leading Cardano DEX. Substantial comments and observations about the ISO raised some important questions about SundaeSwap’s commitment to fairness.

After examining the distribution of its ISO, the results showed that small pools with individual operators lost significant amounts of delegation. By using community processes to name the eligible staking pools for incentives, the ISO caused delegation to move away from smaller and individually operated pools. More than 7 billion delegated ADA moved to about 40 stake pools. The unintended result of community decision-making was a centralization of delegation in larger pools.

The SundaeSwap Reverse ISO sought to remedy the unintended tilt toward larger pools. Following community action and voting, the SundaeSwap Reverse ISO distributed 20 million SUNDAE to help raise ADA delegation among smaller and single operator staking pools. The 20 million SUNDAE rewards to liquidity providers incentivized delegation to small pools, and increased decentralization in SundaeSwap.

The mechanics of the SundaeSwap Reverse ISO were simple. The community voted to prioritize pools that had been left out of the initial offering. Liquidity providers that had put ADA and other assets in designated staking pools received the new SUNDAE tokens. Liquidity providers who pledged assets and ADA to the designated staking pools could also take advantage of other available benefits, such as yield farming.

Why is SundaeSwap a Promising Investment for Cardano?

Decentralization is an essential goal of the Cardano ecosystem as it offers an innovative approach to trading through a decentralized structure. SundaeSwap is complementing ADA and offering an attractive option for increasing participation. This is achieved through its many liquidity pools that reward liquidity providers handsomely with high yields.

Is SundaeSwap a Good Investment for Liquidity Providers?

Investors benefited from the ISO and the SundaeSwap Reverse ISO. The price of Cardano’s native token, ADA, rose sharply in early February of 2022. Investors were attracted by the anticipated SUNDAE listing. The price rose as SundaeSwap demonstrated effective community governance with their Reverse ISO. The community voted to determine SundaeSwap’s role in the Reverse ISO.

Investors benefited from the Reverse ISO by adding their liquidity to the designated small operators. and any reward programs aimed at retention such as yield farming contracts that pay SUNDAE or ADA bonuses in addition to the yield. They also benefited from the increase in market price of the ADA. Finally, investors benefited from the increased activity on the Cardano platform as the staking pools managed the blockchain.

Is SUNDAE a Good Investment for the Future

Investors ask if SundaeSwap is a good investment. What is the reason for its appeal to the ADA community? The SundaeSwap token distribution began with a total minted supply of two billion tokens. About 1.1 billion SundaeSwap tokens were sent to the public, 25 percent to the team, and about 13 percent to investors.

Users reaped SundaeSwap token rewards at the ISO by adding liquidity to the staking pools incentivized by the community. The road map indicates an ongoing series of rewards and opportunities, such as yield farming. The governance is strong, as evidenced by the IPTO, and responsive, as shown by the SundaeSwap Reverse ISO.

With its current feature set, SundaeSwap certainly meets the needs of Cardano user and investors. The Cardano ecosystem needed a high-functioning DEX to manage a high volume of simple trades and transactions. Down the pipeline, the SundaeSwap road map describes broad steps and long-term plans. Its initial protocol has an automatic setting for the project upgrade. The seamless upgrade path is a comfort for investors seeking to hold their stakes for the long run.

Wondering what is SundaeSwap’s impact on ADA prices? Since the SundaeSwap launch, there has been growth in the Cardano ecosystem and the price of ADA. The price of ADA has risen from $0.10 in July 2020 to more than $1.00 in January 2022.

Volume on the Cardano platform has increased in a steady pattern. Transaction activity and the rise in ADA price have moved in a steadily upward direction. Benefiting from innovations and improvements such as the Basho transaction speed revision and smart contracts, the ADA and SundaeSwap token are on a solid path to continued higher transaction volumes and market prices.

All factors considered, the SundaeSwap token appears to be a strong investment with a favorable outlook. SundaeSwap token market predictions suggest strong upward price movement through 2022, during the often vulnerable first year of operation. The governance mechanism promises smooth transitions as protocols evolve. The organization has strong financial backing and an impressive list of operating partners.

The Bottom Line

While SundaeSwap is still in its early stages, they can claim to be the best Cardano DEX because they have established themselves as a reputable DeFi solution on the Cardano blockchain and offer an excellent set of services for decentralized trading. Using the innovative Cardano ecosystem, SundaeSwap intends to construct a noteworthy organization based on community governance and Smart contracts. The impressive list of partners and investors demonstrates the potential for growth, superior performance, and a sound SUNDAE token.