<p>In the last AMA, the SaucerSwap community inquired about HBAR liquidity and how it could be further incentivized to reduce slippage and increase native staking rewards to xSAUCE holders. Community members also asked whether the protocol would direct emissions away from HBARX pools and to SAUCE pools.</p><p>Hashburglar’s response is paraphrased as follows:</p><pre>I’ll reiterate that our top priority remains to bootstrap liquidity in high-demand pools, with the primary metric by which this demand is gauged being trade volume. We are committed to attracting and retaining HBARX liquidity on our DEX. However, it will be limited to select token pairs like HBAR / HBARX and USDC / HBARX. There is much more HBAR liquidity on the network, so it’s more practical to use this token as a base. One must also consider the benefit of an increased HBAR balance to xSAUCE holders due to PoS reward harvesting. We will adjust the farm weights to incentivize new and existing SAUCE, xSAUCE, and HBAR pairs in the coming days and weeks.</pre><p>Therefore, we are incorporating feedback from our community with the following actions:</p><h2>Increased incentives to SAUCE pairs</h2><p>After further consideration, we have decided to achieve these common objectives by increasing the weight of emissions to the SAUCE / USDC, SAUCE / HBAR, and xSAUCE / HBAR farms, with SAUCE / USDC getting a significant boost.</p><p></p><h2>New LCX farm</h2><p>Furthermore, we have created an LCX[hts] / HBAR farm, which presents a unique opportunity of being one of a handful of on-chain, decentralized markets for this asset. <a href="https://www.lcx.com/" target="_blank" rel="noopener noreferrer">LCX</a> is the platform token of a regulatory-compliant exchange of the same name based in Liechtenstein. There is a large subset of HBAR holders who share a common interest in the LCX token, so it makes sense to bridge it to Hedera via <a href="https://app.hashport.network/" target="_blank" rel="noopener noreferrer">hashport</a> (hence the [hts] subscript).</p><p></p><h2>Reduced emissions to HBARX pairs</h2><p>As part of our initiative to partially move incentives away from HBARX and towards HBAR pairs, we have deprecated the SAUCE / HBARX farm. Liquidity providers in this pool will continue to receive LP rewards from swap fees. Farmers, however, will stop receiving rewards and can find the SAUCE / HBARX farm in the “inactive” tab on the farm page.</p><p>In addition to incentivizing SAUCE pairs, the freed up emissions are better directed at new, high-demand pairs like LCX[hts] / HBAR, rather than an arguably redundant pair like SAUCE / HBARX. This follows from the response given in the last AMA. Also following from the AMA, an increased balance of HBAR in the WHBAR contract will amplify native staking rewards, which are distributed to xSAUCE holders in the Infinity Pool (current APR ~ 15%).</p><p></p><h2>Adjusted community farms to reflect demand</h2><p>Finally, we have ended the liquidity mining campaigns for three community farms: SAUCE / LIL, SAUCE / QUACK, and SAUCE / WHALE. While we enjoyed bootstrapping liquidity for these projects, we now think rewards from swap fees will act as a sufficient incentive to continue LPing. For example, the <em>LP reward APR</em> of SAUCE / WHALE is currently a respectable 12.85%. In an effort to adjust for demand, we have reallocated these emissions to SAUCE / LUCKY, whose liquidity has risen to an impressive $350k.</p><p>Beyond this, we have made several minor farm adjustments to account for market demand.</p><p></p><h2>Overview</h2><p>A summary of changes to SaucerSwap farms is as follows:</p><p class="block-img"><img src="https://images.prismic.io/saucerswap/aUALn3NYClf9oMUw_image-7-.png?auto=format,compress" /></p><p>Full overview of farm weights: <a href="https://docs.saucerswap.finance/features/farm/weights" target="_blank" rel="noopener noreferrer">https://docs.saucerswap.finance/features/farm/weights</a></p><p>Please note that the single-sided staking APR is not included in the farm total APR displayed on the farm page. To determine the actual farm total APR, add ½ the single-sided staking APR to the current farm total APR.</p><p><em>Ex: farm total APR( SAUCE / xSAUCE ) = 12.64% + ½ (15.06%) = 20.17%</em></p><p></p><h2>Conclusion</h2><p>These adjustments to our farm weights further incentivize HBAR and SAUCE pairs, such that the liquidity of those tokens can deepen, and single-sided staking rewards can increase. Furthermore, we are proud to welcome the LCX community to our DEX so they can receive staking rewards on SaucerSwap. If you have any questions or thoughts on the above, join the conversation on <a href="https://discord.gg/saucerswap" target="_blank" rel="noopener noreferrer">Discord.</a></p>

In the last AMA, the SaucerSwap community inquired about HBAR liquidity and how it could be further incentivized to reduce slippage and increase native staking rewards to xSAUCE holders. 

Announcement of the LCX listing alongside updates to SaucerSwap’s farm strategy, incentive structure, and liquidity alignment.

LCX Announcement and Revamped Farm Strategy | February

<h2>Introduction</h2><p>V3 is the most ambitious product SaucerSwap Labs has built.</p><p>For three years, we&#39;ve been a liquidity layer: infrastructure that enables trading. V3 makes us a trading platform. A full central limit order book on Hedera&#39;s L1, launching Q2 2026, with its own interface, fee structure, and economic model.</p><p>Hedera has always had more capacity than DeFi has demanded from it. 10,000+ TPS, deterministic ordering, finality in seconds. AMMs don&#39;t need that kind of throughput. Order books do.</p><p>AMMs and order books serve fundamentally different needs. AMMs are permissionless and well-suited for retail traders and liquidity providers. Order books are the instrument of choice for institutions, professional market makers, and anyone who needs precise price control and the ability to deploy serious capital without moving the market. Until now, DeFi on Hedera has only had the former. V3 adds the latter.</p><p>V3 introduces real utility for SAUCE at the protocol level. xSAUCE holders receive trading fee discounts on V3, linking governance participation directly to platform economics.</p><p>Hyperliquid and dYdX proved the institutional appetite for on-chain order books. V3 competes at that level on Hedera&#39;s L1 — no L2s, no custom chains.</p><h2><strong>The Trading Experience</strong></h2><p>The layout is instantly familiar to anyone who&#39;s traded on a centralized exchange.</p><p>TradingView Advanced Charts power the left panel: full OHLCV candles, multiple timeframes from 1-minute to weekly, volume bars, and real-time streaming updates. The order book ladder sits to the right with bids, asks, cumulative totals, spread, and depth updating via WebSocket. Below the chart is order management: open orders, order history, filled positions, and wallet balances.</p><p class="block-img"><img src="https://images.prismic.io/saucerswap/aaHZ6sFoBIGEg8Eh_v3-ui.png?auto=format,compress" alt="Initial sneak peek at SaucerSwap V3 Trade page" /></p><p>Launch order types: market and limit, with post-only for makers and configurable time-in-force. Iceberg, stop-loss, take-profit, DCA, and more are planned for subsequent releases.</p><p>Onboarding takes one minute: connect your wallet and approve the tokens you want to trade. Approvals are per-token (not per-market), so once you&#39;ve approved a token, it works across every market that uses it. After that, placing an order is a single off-chain wallet signature. No fees, no waiting for a transaction. You&#39;re signing an intent. Your funds don&#39;t move unless your order actually executes. Cancellations are instant and free.</p><p>You get complete order history with filtering, sorting, and search. Click into any order and see individual fill breakdowns: exactly what price you got on each partial fill, slippage, everything. Every fill settles on-chain and is independently verifiable. We&#39;re building a signature verification page so anyone can confirm a specific order was signed by a given Hedera account. Order signatures can also be verified independently using the signer&#39;s public key. No trust in our systems required.</p><p>The interface is fully responsive and mobile-optimized, with dedicated Trade and Chart views on any screen size.</p><p>At launch, we&#39;re starting with curated markets. The highest-volume pairs on Hedera: HBAR-USDC, WETH-USDC, WBTC-USDC, SAUCE-USDC, plus select ecosystem tokens. Order books require continuously maintained depth near the current price. For long-tail tokens, V1/V2 remain the better fit.</p><p></p><h2><strong>Technical Architecture</strong></h2><h3>Hybrid Matching and Settlement</h3><p>Orders are matched off-chain through a purpose-built matching engine with millisecond execution. Settlement occurs directly on Hedera&#39;s L1 in a single atomic transaction. No intermediary steps, no bridges, no rollups. Price and quantity parameters execute exactly as specified or fail completely. No fee incurred.</p><p>Sub-second order placement, near-instant cancellations, real-time book updates via WebSockets. Most order book DEXs need L2s or appchains to hit acceptable performance. V3 runs on Hedera&#39;s L1 and achieves better results.</p><h3><strong>Intent-Based Settlement</strong></h3><p>V3 uses an intent-based order model. Users sign a structured order off-chain that specifies exact parameters: token pair, order type, execution price, and amount. This signed intent is the authorization. A settlement contract on Hedera&#39;s L1 executes matched orders atomically.</p><p>Users approve tokens once and sign orders as needed. No per-trade gas fees, no token wrapping, no repeated approvals.</p><h3><strong>Unified Liquidity</strong></h3><p>V3 doesn&#39;t replace V1 and V2. It uses them.</p><p>When the order book cannot fully fill a trade, V3 taps into V1 and V2 liquidity pools as a backstop, routing to the deepest available liquidity across all versions.</p><p>Backstop fills only trigger when they improve execution for the trader. Slippage checks, price divergence detection, and minimum pool liquidity requirements prevent bad fills. Launches with curated markets where backstop fills are most valuable, expanding over time.</p><h3><strong>Governance and Security</strong></h3><p>Markets are configurable through governance: maker/taker fees, tick sizes, minimum order sizes. At launch, market listings are curated and permissioned. Over time, the DAO takes over new market creation and parameter adjustment.</p><p>Security details, audit scope, and the settlement layer&#39;s trust model will be published ahead of launch.</p><h3><strong>Professional-Grade API</strong></h3><p>V3 ships with REST and WebSocket APIs for professional traders and market makers. Batch operations, tiered API access, and higher throughput for market makers with meaningful volume.</p><p></p><h2><strong>Tokenomics</strong></h2><h3><strong>Where SaucerSwap is Today</strong></h3><p>V3 changes how the protocol generates and distributes value. Here&#39;s the current baseline and what shifts.</p><ul><li>V1: ~$230M volume / $15M TVL over the last 12 months. </li><li>V2: ~$3B volume / $26M TVL, representing ~93% of protocol volume. </li><li>Total since August 2022: just over $6B.</li></ul><p>The growth curve matters more than the total: $3B of that volume arrived in the last 12 months. Half of all lifetime activity in one year. That&#39;s consistent with what we&#39;ve been optimizing on the incentives side, most recently in <a href="https://www.saucerswap.finance/governance/elections/5817" target="_blank" rel="noopener noreferrer">Proposal 5817</a>, which shifted rewards toward a fee-primary, health-adjusted allocation framework with concentration controls.</p><h3><strong>V3 Changes the Economic Engine</strong></h3><p>Order books monetize differently than AMMs: instead of a single swap fee, fees are split between takers (who remove liquidity by crossing the spread) and makers (who provide liquidity by posting resting orders). The maker/taker schedule is configurable per market and is ultimately governed by the DAO. SaucerSwap Labs will publish an RFC ahead of launch with a recommended fee and incentive framework, followed by a feedback period before any proposal goes on-chain. The goal: improve execution quality, not subsidize wash volume.</p><h3><strong>Maker/Taker Fees and Rebates</strong></h3><p>At launch, the fee posture we’re working toward is a taker fee in the 5–15 bps range (with a proposed default near 8 bps) and 0 bps maker. That alone is often sufficient in mature markets, but V3 also introduces a controlled lever AMMs don’t have: negative maker fees (maker rebates) on select markets where depth is thin and spreads need tightening. A maker rebate means LPs are paid when their resting orders are filled. These rebates are funded directly from taker fees, not token emissions. The remainder accrues to the protocol as net fees. Incentives are tied to real trading activity and measurable quoting quality, taperable by governance as markets stabilize.</p><h3><strong>xSAUCE as Protocol-Level Utility</strong></h3><p>This is where SAUCE becomes protocol-level utility, not just governance and fee capture. </p><p>On V3, xSAUCE acts as a fee modifier. Stake SAUCE into xSAUCE and receive tiered multipliers on the market&#39;s baseline fee schedule. </p><p>Positive taker fee → staking reduces it. </p><p>Positive maker fee → staking reduces it. </p><p>Negative maker fee → staking increases the rebate. </p><p>This reduces effective trading costs without rewriting headline fees, and it encourages sticky behavior. Serious traders commit capital to SAUCE because it directly improves their unit economics.</p><h3><strong>Buybacks and Fee Routing</strong></h3><p>V3 plugs into the existing fee-to-buyback loop already live on V1 and V2, but with a more fee-productive venue and a clearer set of governance levers. The core accounting is simple: net protocol fees = taker fees collected − maker rebates paid (maker fees add to net; maker rebates reduce it). Net fees route into the BrewSaucer contract and convert to SAUCE through buybacks. Bought-back SAUCE is distributed across configurable buckets: staking rewards, the POL + Incentive Reserve, development funding, and a burn allocation. The burn will be included in the upcoming RFC as part of the initial governance package. The Reserve funds LP incentives today and can extend to V3 incentives over time.</p><p>The burn is a long-term supply-discipline signal: funded from a defined share of retained reserves, trading reserve optionality for permanent supply reduction while keeping core incentive pathways intact. Trading activity generates fees, fees drive buybacks, SAUCE flows back into the ecosystem. No reliance on one-way emissions.</p><h3><strong>Emissions Replacement and the Path to Fee-Driven Sustainment</strong></h3><p>The longer-run trajectory: a gradual shift from emissions dependency to fee-driven sustainment. We modeled this conservatively — V1/V2 volumes grown at 42% YoY from a 2025 baseline, V3 launching May 2026, V3 adoption modeled as a ramp in share of total protocol volume — to estimate how much MasterChef emissions can be offset by recycled fees.</p><p>In the baseline case, V3 reaches roughly 50% of period volume by H2 2027 (about $2.24B of $4.48B), which corresponds to roughly $3.74B of V3 volume in calendar 2027 (about 45.5% of ~$8.22B total protocol volume).</p><p>Under default assumptions (representative fee discount for staked SAUCE, safety-capped rebate program), the model estimates buybacks cover ~31.7% of MasterChef emissions in 2026 (partial-year V3) and ~94.7% in 2027 (full-year V3 plus higher volumes). These are model outputs, not guarantees. Realized replacement depends on sustained volume, market mix, and governance-selected fee parameters. But the direction is clear: by 2027, the system is modeled to be near emissions-neutral. Usage becomes the base layer.</p><h3><strong>Phase 2: Competitive Maker Incentives</strong></h3><p>Phase 1 introduces the core levers: market-level maker/taker pricing, optional maker rebates, xSAUCE fee modifiers. Phase 2 adds volume-weighted maker rebate tiers, keyed to a maker&#39;s sustained share of volume within a given market over a rolling 14-day window.</p><p>The goal: reward continuous contribution to depth and spread quality, concentrate incentives on priority markets, create competitive pressure among professional makers. Without permanently raising taker fees.</p><h2><strong>The Institutional Case</strong></h2><p>Institutional capital has never found a natural home in AMM-based DeFi. Institutions have spent decades in order book environments. They understand the execution models, risk management frameworks, and compliance interfaces. AMMs require a fundamentally different paradigm, and their structural limitations (impermanent loss, slippage on size, fragmented liquidity) don&#39;t clear institutional risk committees.</p><p>Order books are the native interface for institutional trading. V3 gives Hedera one. With compliance integrations and custody partnerships, that&#39;s a real path to institutional volume on-chain.</p><h3><strong>Perpetuals</strong></h3><p>V3&#39;s matching engine, order management infrastructure, APIs, and market maker relationships are the direct foundation for perpetuals. We&#39;re not building perps as a separate product. They&#39;re the next phase of the same system. More on this soon.</p><h3><strong>What&#39;s Next</strong></h3><p>V3 launches Q2 2026. </p><p>Fee and tokenomics RFC, market listings, and integration details to follow.</p>

A full central limit order book on Hedera's L1, with its own interface, fee structure, and economic model.

Introducing SaucerSwap V3

<p>SaucerSwap Labs, Stader Hedera, and HeadStarter — the leading DeFi protocols natively built on Hedera — reiterate their commitment to the network through the formation of a symbiotic alliance. The central premise of the Hashgraph DeFi Alliance, or HDA, is to collaborate in areas that will offer support to both existing Hedera crypto projects and cross-chain projects seeking to migrate to the ecosystem.</p><p>The HDA will provide a cohesive and holistic approach, helping to streamline the efforts of project development on Hedera. This accelerates growth of the ecosystem such that Hedera’s objective of establishing itself as a leading L1 distributed ledger is realised. As a first step in symbolising this commitment, the HDA will launch its own website, enabling the onboarding of new members, and coordinating workgroups while featuring existing and new members.</p><p>Stader is a multi-product platform which offers options for different customer segments to participate in staking. Users can further participate in different DeFi protocols by leveraging liquid tokens for borrowing or providing liquidity. HeadStarter is an IDO Launchpad &amp; Accelerator of the Hedera Ecosystem. Both of these platforms serve as accessible onboarding ramps for users and projects alike. SaucerSwap is a DEX that offers a full suite of DeFi services and serves as a logical endpoint for liquidity from both Stader and HeadStarter. Users can compound their returns by providing liquidity in the form of HBARX (Stader’s liquid token), while projects who choose to IDO on HeadStarter can thereafter create a liquid market for their token by means of Community Pools and subsequent yield farms. Hence each founding member is intertwined, having made important contributions in building the foundation upon which Hedera DeFi will flourish.</p><p>The HDA will further propel this symbiosis by ensuring a sustainable trajectory for the ecosystem. The ongoing focus of seeking and helping the highest quality projects will remain a focus of the Alliance. While our combined expertise will unlock numerous avenues, our primary goal is to safeguard the trust our communities have bestowed upon us.</p><p>The pledge below articulates the overarching purpose of the HDA. These tenets underpin the vital areas unanimously believed to be required for the success of DeFi on Hedera.</p><ol><li>Define standards for the building of Hedera-based DeFi dApps and protocols</li><li>Develop and design tooling resources for development on Hedera</li><li>Release open-source material to accelerate compounded innovation</li><li>Compile research about DeFi on Hedera and formulate strategic SDK feature prioritisation</li><li>Enable knowledge-sharing and development of new entrants for a harmonised discourse for building on Hedera</li><li>Collaborate on joint media outreach efforts which highlight Alliance achievements and projects</li><li>Nurture social media outreach for the Alliance in spreading educational content for growing market penetration of Hedera projects into wider audiences and driving new users and developers to Hedera</li><li>Establish a calendar circuit of events for Hedera First hackathons, educational conferences, associated PR coverage, and other Alliance driven activities</li><li>Work in collaboration to foster a long-lasting culture of inclusivity, fairness, and transparency</li><li>Explore interoperability with other decentralised networks</li><li>Structure a path towards enabling Alliance growth and ensuring members’ needs are met</li></ol><p>In this hypercompetitive industry, cooperation within the Hedera ecosystem is more important than ever. The HDA will foster this, creating value for each project member and delivering more than the sum of its parts to the Hedera community in every way possible.</p>

An overview of the Hashgraph DeFi Alliance, its founding members, objectives, and role in advancing Hedera-based DeFi.

Introducing the Hashgraph DeFi Alliance

<p><strong>TL;DR — Put succinctly, when single-sided staking goes live, you must withdraw liquidity from pairs containing HBAR and then provide that liquidity to the same pair to continue receiving farming rewards. Our website will do all the work routing that liquidity properly to our upgraded pools.</strong></p><p>Below, we will elucidate the mechanisms of this transition, how easy it will be for you as a liquidity provider, and in what ways it will deliver the SaucerSwap protocol into a new era marked by increased user incentives via real yield.</p><h2>Single-Sided Staking Recap</h2><p><a href="https://medium.com/@SaucerSwap/an-introduction-to-single-sided-staking-on-saucerswap-ad92cd816362" target="_blank" rel="noopener noreferrer">An Introduction to Single-Sided Staking on SaucerSwap</a> outlines how SAUCE can be staked in the Infinity Pool in exchange for a receipt token called xSAUCE. There is no risk of <a href="https://docs.saucerswap.finance/tokenomics/risks#impermanent-loss" target="_blank" rel="noopener noreferrer">impermanent loss</a> with this type of liquidity provisioning since only one asset is involved.</p><p>The ratio of SAUCE / xSAUCE increases due to SAUCE buybacks from three distinct sources: swap fees from all pools, farm emissions, and HBAR native staking rewards. Here, users may redeem their xSAUCE for SAUCE at a higher exchange rate than when they deposited. In this regard, the mechanism functions similarly to <a href="https://hedera.staderlabs.com/lt/hedera" target="_blank" rel="noopener noreferrer">Stader</a> liquid staking, i.e., HBAR / HBARX.</p><p>xSAUCE is an essential component of the SaucerSwap ecosystem, as it will connect users with HTS projects via <a href="https://docs.saucerswap.finance/features/community-pools" target="_blank" rel="noopener noreferrer">Community Pools</a>.</p><h2>WHBAR and Native Staking Explained</h2><p>HBAR is not an HTS token — analogous to ETH vs. ERC-20 — so it must be wrapped to interact with the SaucerSwap contracts. This is achieved via a smart contract that stores incoming HBAR and mints wrapped HBAR. These <a href="https://hashscan.io/mainnet/contract/0.0.1062663" target="_blank" rel="noopener noreferrer">WHBAR</a> tokens are used to provide liquidity in SaucerSwap’s decentralized exchange. When liquidity is withdrawn, WHBAR tokens are sent back to the smart contract and burned, and an equal amount of HBAR is returned to the user.</p><p>With the introduction of native staking, the HBAR in this smart contract can be dynamically staked to a permissioned node to generate real yield for users. Since Hedera does not impose <a href="https://hedera.com/blog/why-is-there-no-slashing-in-hederas-proof-of-stake" target="_blank" rel="noopener noreferrer">slashing or lockup periods</a>, SaucerSwap users can withdraw liquidity instantaneously. The current amount of HBAR deposited in SaucerSwap’s WHBAR contract is over 130Gℏ (eq. to $7.8MM @ $0.06 per HBAR), which can generate significant yield for both xSAUCE holders and the DAO Treasury.</p><p class="block-img"><img src="https://images.prismic.io/saucerswap/aT_wgnNYClf9oMCB_0_ayj2YHf9KdZf_V8m.png?auto=format,compress" /></p><p>The native staking mechanics of the WHBAR contract are described in the above figure. Here, the WHBAR contract is deployed, setting the stakedAccountId to a simple smart contract. This StakeToSetter contract has an admin key to select a node for staking and allows its beneficiary to withdraw the accrued rewards. The WHBAR contract will not have an admin key and will therefore be completely decentralized.</p><p>Once daily, at a random time, an allocation of HBAR native staking rewards is pulled from an intermediary payment splitter contract. This HBAR is swapped for SAUCE in the BrewSaucer contract before being sent to the Infinity Pool. Since the ratio of SAUCE to xSAUCE in the pool increases, so does the relative value of xSAUCE.</p><h2>What this means for you as a Liquidity Provider</h2><p><em>Note: no immediate action is required; however, the information below outlines future steps you will need to take.</em></p><p>For SaucerSwap to take advantage of native staking rewards, a new WHBAR contract must be deployed. This deployment will cause minimal interruptions; however, it will require some user action.</p><p>All liquidity pools containing the existing WHBAR token will be deprecated, i.e., no longer used to route swaps; instead, upgraded pools containing the new WHBAR token will be used. Users will be able to withdraw liquidity from the deprecated pools at any time; however, they will no longer have the ability to provide liquidity to these deprecated pools through SaucerSwap’s website. Instead, the site will automatically direct all deposits to the upgraded pools.</p><p>The SaucerSwap team will create upgraded pools for all supported pairs (i.e., those with farms) to ensure a smooth user experience. The one-time fee associated with creating other pools will be lowered to $10 for one week following the migration, after which it will be set back to $50.</p><p>Therefore, we encourage all liquidity providers to do the following once directed by the SaucerSwap team:</p><ol><li>Identify if you are providing liquidity in a pool containing WHBAR — all existing pairs containing HBAR fall in this category (e.g., HBAR-SAUCE, HBAR-USDC, etc.).</li><li>If you have LP tokens containing WHBAR, unstake those LP tokens on the <a href="https://www.saucerswap.finance/farm" target="_blank" rel="noopener noreferrer">farm page</a> if applicable — these deprecated farms will be found in the “inactive” tab.</li><li>Withdraw your liquidity for pairs containing WHBAR in the “My Pools” tab on the <a href="https://www.saucerswap.finance/liquidity/pools" target="_blank" rel="noopener noreferrer">liquidity page</a>.</li><li>Provide liquidity to the same pair — for example, if you withdraw HBAR-SAUCE LP tokens, provide liquidity back to the HBAR-SAUCE pool. Our site will automatically route your liquidity to the upgraded pools.</li><li>If applicable, stake those LP tokens in the new farm to receive HBAR and SAUCE emissions.</li><li>Be mindful of the <a href="https://docs.saucerswap.finance/features/farm#apr" target="_blank" rel="noopener noreferrer">inverse relationship</a> between APR and liquidity — those who stake first will receive a higher yield.</li></ol><p><strong>Note: If you have any questions about the above process, please reach out in the <a href="https://discord.com/invite/saucerswap" target="_blank" rel="noopener noreferrer">SaucerSwap Discord</a> and a team member will assist you.</strong></p><p>Once the new WHBAR contract is deployed, farm emissions to supported pools containing the current WHBAR will be set to zero. Afterwards, these farms will appear in the inactive tab of the farm page, as seen in the figure below.</p><p class="block-img"><img src="https://images.prismic.io/saucerswap/aT_wqXNYClf9oMCE_image-1-.webp?auto=format,compress" /></p><p>A new farm will be created for each existing farm containing HBAR. The same token pairs will be incentivized (with the same farm weight). The only difference here is the use of the new WHBAR.</p><h2>Summary</h2><p>A new WHBAR contract will be deployed, coinciding with the release of single-sided staking in November. When this occurs, users are encouraged to withdraw liquidity from existing pools containing WHBAR and deposit it in upgraded pools to continue earning swap fees. If a deprecated pool has a corresponding yield farm, a new farm with an identical weight will be created for the upgraded pool. Our team will provide frequent updates as we approach this migration date, representing an exciting milestone for the SaucerSwap protocol.</p>

This article will explain the logistics of implementing HBAR native staking on the SaucerSwap protocol, which requires some user action to continue earning a percentage of swap fees and, where applicable, farm emissions. HBAR native staking rewards are now live on the Hedera mainnet, which opens the door for SAUCE staking — slated for November 2022.

Details on the WHBAR migration process, including timelines, required user actions, and changes related to native staking integration.

SaucerSwap WHBAR Migration Announcement

<p>The launch of SaucerSwap v2 is fast approaching, pending the release of a final audit report by <a href="https://omniscia.io/" target="_blank" rel="noopener noreferrer">Omniscia</a> and some remaining work on the front-end. In the meantime, the SaucerSwap core maintainers are excited to introduce the <em>Liquidity-Aligned Reward Initiative (LARI)</em>, a novel feature of SaucerSwap v2 that will be available at launch.</p><p>SaucerSwap v2, a concentrated liquidity market maker (CLMM), affords liquidity providers (LPs) the potential for higher real yields through increased capital efficiency. However, token incentives are still crucial for bootstrapping liquidity, ensuring a broad distribution of <a href="https://docs.saucerswap.finance/tokenomics/sauce-token" target="_blank" rel="noopener noreferrer">SAUCE</a>, and strengthening protocol governance.</p><p>LARI provides users with token incentives for their active and efficient liquidity contributions. This system represents an advancement from traditional yield farming, addressing certain limitations of SaucerSwap v1’s <a href="https://docs.saucerswap.finance/features/farm" target="_blank" rel="noopener noreferrer">Masterchef</a> contract. Notably, the obligatory staking of LP tokens, which transfers LP custody, is not optimal. Moreover, it is inefficient to reward LPs without accounting for their performance. Every reward token, such as SAUCE or HBAR, should not only incentivize liquidity but also ensure its optimal use, with rewards reflecting this objective.</p><p>LARI addresses these design shortcomings. As with swap fees, LPs no longer have to stake their assets to begin earning token incentives. Once an LP provides liquidity to a v2 pool, LARI is activated for their position. Furthermore, rewards are automatically distributed at the end of each two-week reward period, or ‘epoch’, greatly simplifying the UX and optimizing for gas efficiency. Unlike the SaucerSwap v1 implementation of Masterchef, which only supports SAUCE and HBAR rewards, <em>LARI can be configured to emit HBAR and any number of HTS tokens for each pool.</em> This enables projects to tailor campaigns for their liquidity pools, rewarding LPs with their protocol token.</p><h2>How it works:</h2><ul><li><strong>Initialization:</strong> Before the epoch begins, each liquidity pool is assigned a weight of token emissions. For example, the HBAR/USDC pool may receive 15% of the total SAUCE rewards over this 14-day period.</li><li><strong>Monitoring:</strong> During the epoch, the v2 pair contracts are continuously listened to for liquidity mint and burn events; these events are captured and stored. By epoch-end, each LP’s number of ‘liquidity hours’, representing liquidity in the active ticks (corresponding to token price), is multiplied by the time passed in hours.</li><li><strong>Reward Calculation:</strong> As the active tick changes, the LP’s liquidity position may fall in and out of range. SaucerSwap’s algorithm for calculating rewards takes into account the position’s time spent within range of the active tick and only accumulates rewards while the position’s liquidity is being used. The final distribution of rewards to LPs per epoch is calculated by:</li></ul><p class="block-img"><img src="https://images.prismic.io/saucerswap/aUAOK3NYClf9oMWb_image.gif?auto=format,compress" /></p><ul><li><strong>Distribution:</strong> At the end of each epoch, rewards are automatically sent to the participants via an airdrop. If any issues arise, such as a token not being associated, the distribution specific to an LP is rescheduled for the next epoch.</li></ul><p>This system ensures maximal efficiency by only rewarding active liquidity. This focus not only improves the overall health of liquidity pools but also maximizes the utility and efficiency of each token distributed as a reward.</p><p></p><h2>Example:</h2><p>Alice and Bob both decide to provide liquidity to the USDC[hts]/USDT[hts] pool on SaucerSwap v2. This pool has a 0.05% fee and a tick spacing of 10, where every tick represents a 0.01% change in price.</p><p><strong>Alice’s Strategy:</strong> Alice has a relaxed strategy and provides $10k of liquidity over a wide price range of $0.95 to $1.05, or 1,000 ticks.</p><p><strong>Bob’s Strategy:</strong> Bob, on the other hand, has a more focused strategy. He provides $10k of liquidity over a much narrower price range of $0.9995 to $1.0005, or 10 ticks.</p><p>We assume that, throughout the epoch, the price of the pool remains stable and stays entirely within the $0.9995 — $1.0005 range.</p><p>Given his focused strategy and the price staying within his range, Bob accumulates 336,000,000 liquidity hours over the 14-day epoch. Even though Alice and Bob provided the same capital, Alice’s liquidity hours in the active price range tally up to only 33,600, given the distribution of her liquidity.</p><p>Bob’s decision to provide liquidity in a narrow, focused range where he anticipated price activity led him to outperform Alice in terms of rewards by a factor of 10,000. Alice’s broader strategy, although safer in terms of exposure to price movement, did not capitalize as efficiently on the rewards during this particular epoch.</p><p>See the table below for a breakdown:</p><p class="block-img"><img src="https://images.prismic.io/saucerswap/aUAQQ3NYClf9oMYJ_1IUIm4DZDrDirbCzSRZuBGw.png?auto=format,compress" /></p><p><em>It’s worth noting that the probability of USDC[hts]/USDT[hts] consistently trading within the $0.9995 — $1.0005 range over a 14-day epoch is low. In a real-world scenario, Bob’s accumulated liquidity hours would likely be less than the theoretical maximum provided in this example.</em></p><h2>Tokenomics:</h2><p>As the community will recall from the <a href="https://medium.com/@SaucerSwap/saucerswap-v2-tokenomics-proposal-b355182545a6" target="_blank" rel="noopener noreferrer">Tokenomics v2 Proposal</a>, there will be a 60% cut to the inflation rate of SAUCE and a reallocation of SAUCE emissions as follows:</p><ul><li>90.91% → 47.16% to v1 farm rewards (<em>decrease</em>)</li><li>9.09% → 9.09% to devcut (<em>no change</em>)</li><li>0% → 43.75% to the DAO treasury (<em>increase</em>)</li></ul><p>The full 43.75% DAO allocation (55.49 SAUCE / min) will go towards LARI for the first four epochs. For subsequent epochs, half the allocation will tentatively go towards LARI, while the other half is retained by the DAO for future use.</p><p class="block-img"><img src="https://images.prismic.io/saucerswap/aUAOuHNYClf9oMW4_1_lbHOSipOmUA0FiPOgFjpGg.webp?auto=format,compress" /></p><p class="block-img"><img src="https://images.prismic.io/saucerswap/aUAOvnNYClf9oMW5_1_8mfoGiUt3tdtOGUfRHlVaQ.webp?auto=format,compress" /></p><p>At the beginning of SaucerSwap v2’s launch, the rewards will be highest. This will boost yields and facilitate a seamless migration of liquidity to the v2 pools. Rewards will then be gradually tapered, stabilizing at approximately 559k SAUCE per epoch by week eight.</p><h2>Summary:</h2><p>SaucerSwap v2 introduces the <em>Liquidity-Aligned Reward Initiative,</em> or LARI. This revamped system not only rectifies the shifted custody concerns for LPs, but also aligns rewards with LP efficiency and broadens the scope by accommodating HBAR and any HTS token as rewards.</p><p>Additionally, LARI integrates well with the updated tokenomics model, especially as the DAO now receives an allocation of SAUCE minted by the Masterchef contract. Directing a portion of this SAUCE to v2 pools via LARI results in a balanced, equitable, and streamlined incentive framework post-inflation adjustment.</p><p>In short, LARI aims to ensure a smooth transition to the CLMM and an enhancement in overall functionality and user experience on <a href="https://www.saucerswap.finance/" target="_blank" rel="noopener noreferrer">SaucerSwap</a>.</p>

The launch of SaucerSwap v2 is fast approaching, pending the release of a final audit report by Omniscia and some remaining work on the front-end.

An explanation of the Liquidity-Aligned Reward Initiative, detailing how rewards are structured to incentivize efficient liquidity provision.

SaucerSwap v2: Liquidity-Aligned Reward Initiative (LARI)

<p>Hedera has long delivered the performance and throughput required to support next-generation financial infrastructure at scale, with fast finality, low fees, and energy efficiency setting it apart from competing networks. What it needed was a reliable bridge to bring capital from other chains into the ecosystem. LayerZero now provides that connection.</p><h2>What is LayerZero?</h2><p><a href="https://layerzero.network/" target="_blank" rel="noopener noreferrer">LayerZero</a> is an omnichain interoperability protocol that enables asset transfers and messaging across blockchains. Unlike traditional bridges, which typically lock assets in a custodial smart contract and rely on a centralized set of validators to confirm transactions, LayerZero uses decentralized verification to pass messages between chains directly. This removes the single point of failure that has made traditional bridges a frequent target for exploits. For users, this means you can move assets from Ethereum directly to Hedera without going through a centralized exchange or trusting a third party to custody your funds in the process.</p><h2>What it means for SaucerSwap</h2><p>LayerZero integration brings ERC-20 assets onto Hedera that can be traded directly on SaucerSwap. Pools like HBAR/WETH, HBAR/WBTC, USDC/WETH, and USDC/WBTC are all LayerZero-bridged pools.</p><p>For traders, this means access to major assets like ETH and BTC within a Hedera-native DEX environment, with Hedera&#39;s transaction speeds and low fees. For liquidity providers, these pools offer exposure to high-volume assets while earning fees on a chain where costs are a fraction of what they&#39;d be on Ethereum and is immune to front-running.</p><h2>Volume and liquidity impact</h2><p>LayerZero bridge pools consistently rank among the highest TVL pools on SaucerSwap V2, with $6.38M across WETH and WBTC LayerZero bridge pools. Their trading activity has been equally impressive, with the two tokens combining for over $100M in volume in under six months, split between $77.34M from WETH and $23.12M from WBTC. The latest incentives realignment acknowledged this by increasing LARI weights to LayerZero pools via a fee-weighted methodology, recognizing that bridged assets attract meaningful trading activity that benefits liquidity providers and xSAUCE holders via fee-capture, buybacks, and redistribution. The <a href="https://gov.saucerswap.finance/t/saucerswap-incentives-realignment-and-hbar-rewards-simplification/322" target="_blank" rel="noopener noreferrer">updated LARI weights</a> reflect this:</p><ul><li>HBAR/WETH: 7.74% (0.15% fee tier)</li><li>HBAR/WBTC: 6.20% (0.30% fee tier)</li><li>USDC/WBTC: 3.24% (0.15% fee tier)</li><li>USDC/WETH: 2.11% (0.15% fee tier)</li></ul><p>In the past month alone, WETH and WBTC LayerZero pools generated $26.71M in trade volume, representing 15.2% of total SaucerSwap protocol volume.</p><p>Cross-chain capital doesn&#39;t sit idle. It gets routed through SaucerSwap, generating fees and driving volume that purely native liquidity alone cannot. LayerZero pools generated $47.3K in swap fees this past month, with 1/6 directed to SAUCE buyback and the remaining 5/6 distributed to liquidity providers.</p><p>This matters for the broader Hedera ecosystem too. Every dollar bridged in from Ethereum or other networks represents net capital inflow to Hedera&#39;s DeFi layer. That capital deepens liquidity, tightens spreads, and makes Hedera a more competitive trading environment for everyone.</p><h2>The bigger picture</h2><p>Cross-chain interoperability is one of the defining infrastructure challenges in DeFi. Chains that remain isolated struggle to attract capital from users and institutions already deployed on larger networks. LayerZero removes that friction for Hedera, creating a pathway for ETH and BTC holders to access Hedera&#39;s ecosystem without fully exiting their existing positions.</p><p>LayerZero is already one of the most widely deployed interoperability protocols in the space, and its ambitions have grown well beyond bridging. LayerZero recently launched <a href="https://www.theblock.co/post/389295/citadel-and-ark-invest-back-layerzero-as-it-launches-blockchain-partners-with-google-cloud-and-dtcc?utm_source=rss&amp;utm_medium=rss" target="_blank" rel="noopener noreferrer">Zero</a>, a new Layer 1 blockchain backed by Citadel Securities, ARK Invest, DTCC, Google Cloud, and Intercontinental Exchange, positioning itself as core infrastructure for institutional finance. As LayerZero&#39;s institutional footprint expands, so does the range of assets and liquidity it can route into Hedera&#39;s ecosystem, and SaucerSwap is already positioned to grow with it.</p>

LayerZero's omnichain interoperability protocol now bridges ERC-20 assets directly onto Hedera, enabling decentralized, trustless cross-chain transfers that have already driven over $100M in trading volume through SaucerSwap in under six months — with $6.38M in TVL across WETH and WBTC bridge pools alone.

Learn how LayerZero's omnichain interoperability protocol bridges ETH and BTC onto Hedera, enabling trustless cross-chain transfers and driving over $100M in trading volume through SaucerSwap's LayerZero pools.

LayerZero on SaucerSwap: Bringing Cross-Chain Capital to Hedera

<p>The initial grant was structured as follows:</p><ul><li>10M HBAR over the first two months</li><li>6M HBAR over the second two months if TVL &gt; $5M</li><li>4M HBAR over the final two months if TVL &gt; $15M</li></ul><p>To achieve this continued yield, 20% of HBAR native staking rewards have been redirected from daocut to the farm contract. Assuming the current WHBAR balance of ~140 million and a 6.5% proof-of-stake APR, this amounts to 1.82 million HBAR per year distributed as liquidity mining incentives to farmers. The rewards sent to mothership.sol remain unchanged, therefore this will have zero negative impact on the single-sided staking APR.</p><p>The contribution of HBAR to the farm base APR will continue to be outweighed by SAUCE, however these incentives will increase as a function of TVL (WHBAR balance) and price. Since proof-of-stake rewards are derived from Hedera network fees, HBAR emitted to SaucerSwap farmers is considered real yield (i.e., not inflation-driven or subsidized via a grant), so is both sustainable and predictable.</p><p>The tokenomics will be reassessed once the DAO is phased in, at which point it may make sense to reallocate a portion of these HBAR native staking rewards to daocut. For now, the DAO treasury will continue receiving SAUCE from protocol buybacks and as specified in the <a href="https://docs.saucerswap.finance/tokenomics/emission-schedule" target="_blank" rel="noopener noreferrer">release schedule</a>. Furthermore, the SaucerSwap team will continue exploring ways to enhance yields, such as through a concentrated liquidity market maker (CLMM) protocol, which is currently under development.</p>

SaucerSwap, as part of its real yield initiative, will be extending its HBAR emission runway indefinitely. This means that the farm contract will continue to emit both SAUCE and HBAR, despite the initial HBAR Foundation grant coming to an end. It’s important to note that SaucerSwap has received the entire 20 million HBAR from the Foundation as all TVL milestones were achieved per the terms of the grant.

Announcement extending HBAR mining incentives on SaucerSwap, detailing updated timelines, reward parameters, and liquidity goals.

Extension of HBAR Mining Incentives on SaucerSwap

<h2><strong>Introduction</strong></h2><p>As DeFi continues to democratize financial systems, SaucerSwap leads the way with its on-chain governance system, powered by the Hedera Consensus Service (HCS). This system is embodied by the SaucerSwap DAO, which plays a pivotal role in managing key aspects of the protocol, particularly the alignment of incentives through reward allocation across both V1 and V2. While the protocol itself operates autonomously via immutable smart contracts, the DAO empowers the community to influence its adaptation to an ever-changing market.</p><p>With the launch scheduled for Monday, August 5th, at 18:00 UTC, this article explores the governance process within SaucerSwap, detailing how the community’s collective decision-making shapes the protocol’s development and future direction.</p><h2>Token-Weighted Voting</h2><p>At the heart of the SaucerSwap DAO is the power of its community, represented through the holdings of SAUCE and xSAUCE tokens. Voting power is determined by a user’s balance of these tokens, with xSAUCE converted to its SAUCE equivalent. The formula for calculating voting power is:</p><pre>Voting Power = SAUCE bal + (xSAUCE bal × conversion rate)</pre><p>Vote counting and results will be updated every minute, with the final tally taken at the exact end of the voting period to ensure an accurate reflection of voting power throughout the governance process. This method ensures that the voting power accurately represents the most current token holdings for each proposal.</p><h2><strong>Governance Process</strong></h2><p>The governance process consists of three distinct phases: Request for Comment (RFC), Proposal, and Election. Each phase is designed to facilitate efficient, transparent, and meaningful community engagement.</p><h3><strong>1. Request for Comment (RFC) Phase</strong></h3><ul><li><strong>Purpose:</strong> Gather initial feedback and refine proposals.</li><li><strong>Duration:</strong> Minimum of 3 days.</li><li><strong>Requirements:</strong> No minimum voting power required.</li><li><strong>Platform:</strong> Discussions occur on the SaucerSwap Governance Forum at <a href="https://gov.saucerswap.finance/" target="_blank" rel="noopener noreferrer">gov.saucerswap.finance</a>.</li></ul><p>The RFC phase is an open forum where community members can present and discuss proposed changes. It’s a brainstorming stage with no minimum voting power requirement, allowing for diverse input and proposal refinement.</p><h3><strong>2. Proposal Phase</strong></h3><ul><li><strong>Purpose:</strong> Formalize and submit proposals for voting.</li><li><strong>Duration:</strong> 2 days.</li><li><strong>Requirements:</strong> Minimum of 100k units of voting power to submit a proposal.</li><li><strong>Quorum:</strong> 10M voting power and majority to proceed with Election.</li><li><strong>Platform:</strong> HCS-based voting conducted via the <a href="https://www.saucerswap.finance/governance" target="_blank" rel="noopener noreferrer">SaucerSwap Interface</a>.</li></ul><p>After gathering feedback, a refined proposal is submitted for voting. To move forward, the proposal must reach a quorum of 10M units of voting power and a majority vote. Additionally, it requires a minimum of 100k units of voting power from the proposer.</p><h3><strong>3. Election Phase</strong></h3><ul><li><strong>Purpose:</strong> Final community vote on proposals.</li><li><strong>Duration:</strong> 2 days.</li><li><strong>Requirements:</strong> 40M voting power quorum and majority for enactment.</li><li><strong>Platform:</strong> HCS-based voting conducted via the <a href="https://www.saucerswap.finance/governance" target="_blank" rel="noopener noreferrer">SaucerSwap Interface</a>.</li></ul><p>The final phase is automatically triggered if Proposal voting criteria is met. It involves another vote via HCS for enactment. An Election must achieve a quorum of 40M units of voting power and a majority vote to be enacted.</p><h2><strong>Technical Implementation</strong></h2><p>The HCS facilitates voting for SaucerSwap proposals and elections through a designated HCS Topic ID. Users connect their wallets to saucerswap.finance/governance to sign and submit voting messages in JSON format to HCS. Upon receiving a vote, SaucerSwap uses the Hedera mirror node to access the voter’s historical balances of SAUCE and xSAUCE at a specific UNIX timestamp. Users can vote multiple times, but only their final vote is counted. This system avoids smart contract risks while inheriting the speed and efficiency of the HCS.</p><h2><strong>Governance Scope</strong></h2><p>The governance scope includes:</p><ul><li><strong>Default Token Listings:</strong> The default list includes larger and established projects, such as high-value bridged assets and prominent Hedera projects. To be added, projects must pass due diligence, a DAO vote, and meet liquidity requirements.</li><li><strong>V1 Farm Creation and Amendment:</strong> The DAO oversees the creation of new yield farms and the adjustment of emissions for existing farms. Projects must meet liquidity and trading volume criteria and pass a community vote to qualify for dual token emissions in SAUCE and HBAR.</li><li><strong>V2 Pool Creation:</strong> Initially permissioned to prevent liquidity fragmentation, new pools in SaucerSwap V2 are curated and governed by the DAO.</li><li><strong>V2 LARI Campaign Creation and Amendment:</strong> The Liquidity-Aligned Reward Initiative (LARI) allows liquidity providers to earn additional incentives. Proposals for creating or amending LARI campaigns are submitted to SaucerSwap Labs and require DAO approval.</li><li><strong>Tokenomics Changes:</strong> Any significant changes to SAUCE tokenomics proposed by core maintainers must be approved by the DAO.</li></ul><p>Matters outside this scope, such as treasury management and meta-governance, are managed by the SaucerSwap core maintainers for the time being.</p><h2><strong>Conclusion</strong></h2><p>The SaucerSwap DAO empowers its community to participate in the protocol’s governance, ensuring that decisions are made collectively and transparently. From token listings to liquidity pool management, the DAO’s influence shapes the protocol’s future, reflecting the values and priorities of its members. As SaucerSwap continues to evolve, its DAO remains a cornerstone of its decentralized and community-driven ethos.</p>

As DeFi continues to democratize financial systems, SaucerSwap leads the way with its on-chain governance system, powered by the Hedera Consensus Service (HCS).

Introduction to SaucerSwap’s on-chain governance model, covering proposal mechanics, voting design, and community participation.

SaucerSwap | Introducing On-Chain Governance

<p>SaucerSwap is a fork of Uniswap v2 — an on-chain system of smart contracts on the Ethereum blockchain — that leverages the Hedera Smart Contract Service (HSCS) to include Solidity smart contract integration with the Hedera Token Service (HTS). These smart contracts implement an automated market maker (AMM) protocol based on the constant product formula &quot;XY=K&quot;.</p><p>Here, liquidity is derived from pooled reserves, x and y of any two HTS tokens, such that the product of the reserves, k, remains constant while traders swap in the pool. Compared to other DEXes, swapping tokens on SaucerSwap is safer and affords an overall better user experience. This is in part due to the fast finality, low fees, and unprecedented speed of the Hedera network. Furthermore, given that Hedera has no mempool, there is no risk of being frontrun. As of June 14th 2022, the total miner extractable value (<a href="https://www.youtube.com/watch?v=Wd0at2Pu6xY" target="_blank" rel="noopener noreferrer">MEV</a>) on Ethereum is <a href="https://explore.flashbots.net/" target="_blank" rel="noopener noreferrer">$652,952,888</a>, with Uniswap accounting for the highest percentage of transactions.</p><p>SaucerSwap differs from Uniswap v2 in many fundamental ways. For example, the Ethereum network uses the ERC20 and ERC721 standards for token operations, meaning tokens are themselves contracts. On Hedera, however, token operations are performed on HTS. This is made possible by recent HSCS upgrades allowing smart contracts to use HTS through EVM precompiles. It must be stated that, while it was always possible to create a DEX on Hedera using the ERC20 standard, the network can now fully support tokens created by and controlled through HTS, representing the novelty of SaucerSwap. This is a significant differentiating factor, as SaucerSwap is positioned to take advantage of the network’s consistent and predictable fee structures for token operations.</p><p>Like any DEX, users are the ones providing liquidity. They do so by providing equal value parts of two HTS tokens to a pool in exchange for LP tokens, representing their share of the pool. Furthermore, with the advent of HIP-329 — which introduced the CREATE2 opcode to the Hedera mainnet — anyone can create a liquidity pool. The incentive for liquidity provision arises in part from the 0.30% swap fee. 5/6 of these fees are aggregated and redistributed back to all liquidity providers on a pro-rata basis based on the amount of LP tokens they hold.</p><p>A further incentive to provide liquidity lies in a staple of most DEXs, which is yield farming. SaucerSwap is no exception and gives users the ability to stake their LP tokens in crop circles. Each crop circle on the protocol corresponds to a liquidity pool (e.g., HBARX/DOV) and receives a weight of SAUCE emissions from the farm smart contract. It follows that users are still collecting fees whenever someone swaps between the pair they have provided, in addition to receiving farming rewards<em>. </em>It is worth noting that both crop circle and single-stake pools (explained later on) will have an additional feature, that being game-theory incentivized staking. For the sake of brevity, a link to GTIS can be found <a href="https://docs.saucerswap.finance/features/crop-circles/game-theory-incentivized-staking" target="_blank" rel="noopener noreferrer">here</a>. Back on topic, the rate of emissions is constant and 800M SAUCE will be released over a 3-year period. This release schedule is different from many protocols, who instead opt for a linear decay model where the rate of emissions decreases over time. They do this to compete in saturated markets, as it affords them the ability to offer higher APRs in their infancy, and in turn, bootstrap liquidity. The downside to this is that it lacks longevity, as yields dry up much more rapidly.</p><p>SaucerSwap will offer a full-suite of DeFi services and aims to be a one-stop-shop on Hedera. Shortly after launch, a bridge integration, single-sided staking, community pools, and a DAO-based governance model will be implemented.</p><p>In terms of a bridge, SaucerSwap will integrate a third-party cross-chain router protocol on its site. This bridge will be similar in nature to Multichain, which allows almost all blockchains to inter-operate. As it relates to the DEX, users will be able to seamlessly bridge to and from Hedera, with SaucerSwap serving as the endpoint for this cross-chain liquidity. The inflow of new tokens (e.g., DAI, USDT, BTC, ETH) will undoubtedly have a profound effect on the network and its TVL.</p><p>Single-sided staking requires only one type of token. By staking SAUCE in the Infinity Pool, a user immediately receives SAUCEr tokens as receipt of the liquidity they provided. The Infinity Pool then automatically compounds via SAUCE buybacks. Similar to Stader, the ratio of SAUCE to SAUCEr is always increasing, thus SAUCEr is perpetually increasing in value relative to SAUCE. It is also worth noting that there is no risk of impermanent loss within single-stake pools.</p><p>This leads us to Community Pools, which are complementary to single-sided staking. Once a thoroughly vetted project has completed their IDO on HeadStarter’s launchpad, they will have the option to be fast-tracked onto SaucerSwap with a Community Pool, and subsequent supported pool with a corresponding yield farm. The community will then vote on a core proposal as per the DAO-based governance (explained later on). If this proposal reaches a passing vote by quorum, the HTS project will be listed on the platform and subsequently emit their token to a single-stake pool, aka Community Pool. Users who have staked SAUCE for SAUCEr can then stake SAUCEr in these Community Pools to receive both SAUCE and the HTS token in question for multiple streams of income (sum of APRs). After the HTS token emission runs out, the pool will become inactive, however, a liquidity pool with corresponding crop circle will follow.</p><p>Next, we will discuss SaucerSwap’s unique approach to governance. A decentralized governance model will be gradually phased in, with the team initially controlling the protocol such that core features can be implemented. Once this is completed, governance will transition to a DAO. To ensure true decentralized governance, SaucerSwap will leverage an HCS-based ballot and token-weighted voting architecture. An example of this is <a href="https://github.com/the-creators-galaxy/creators-galaxy-improvement-proposals/blob/master/CGIP/cgip-4.md" target="_blank" rel="noopener noreferrer">CGIP-4</a>. SaucerSwap’s governance model is inspired by Hedera’s path to decentralization; namely, how their nodes are operated by governing council members but will grow to include permissioned community nodes, then anonymous nodes. Similar to how Hedera will open node operation to more entities and individuals as performance, security, stability, and incentives of the network mature; SaucerSwap’s DAO-based governance model will become more decentralized as core features are added to the protocol.</p><p>At this stage of SaucerSwap’s life cycle, the DAO is phased in, and as such, the community will steer the direction of the protocol. Possible future implementations include gamification (e.g., lotteries and prediction markets) akin to PancakeSwap, a lending protocol enabling non-custodial leveraged trading on the DEX, social functionalities leveraging Hedera’s microtransaction capabilities, <a href="https://coinmarketcap.com/alexandria/glossary/liquidity-bootstrapping-pool-lbp" target="_blank" rel="noopener noreferrer">liquidity bootstrapping pools</a> offering the ability to launch tokens with low capital requirements, and more. Given Hedera’s outstanding advantages above other L1s, the prospects for DeFi on the network are bright, and SaucerSwap intends to lead the new wave of innovation as the pioneering DEX on Hedera.</p>

An overview of SaucerSwap’s role as a decentralized exchange on Hedera, highlighting protocol design and ecosystem positioning.

SaucerSwap: The Pioneering DEX on Hedera

<h2><strong>Introduction</strong></h2><p>Auto Pools, a feature of SaucerSwap V2 leveraging ICHI’s ‘Yield IQ’ for Active Liquidity Management (ALM), are launching in March 2024. This feature simplifies concentrated liquidity provision by allowing users to deposit a single token into an automated vault. These vaults allocate funds across specific price ranges in the underlying liquidity pool to optimize fee earnings and mitigate impermanent loss risk, making the process efficient and user-friendly.</p><p>The term ‘ichi,’ meaning ‘one’ in Japanese, aptly reflects their defining single-asset deposit mechanism, requiring users to provide just one token for liquidity, from which the protocol takes over the management process to keep liquidity concentrated around the active tick.</p><p>Auto Pools are set to integrate with all SaucerSwap V2 pools, with most pools offering two vaults (one for each token in the pool). Despite Auto Pools supporting all V2 pools, users will always have the flexibility to create a manual position in any SaucerSwap V2 pool if they prefer. For instance, the WBTC[hts]/HBAR pool has vaults for both WBTC[hts] and HBAR. The SAUCE/HBAR and SAUCE/USDC pools are exceptions, offering vaults specifically for HBAR and USDC, respectively.</p><h2><strong>Key Features of Auto Pools</strong></h2><p><strong>Single-Token Deposit:</strong> Users can contribute to liquidity pools using just one asset, receiving ERC-20 LP tokens in return. This simplification enhances accessibility and convenience.</p><p><strong>Dynamic Rebalancing:</strong> Auto Pools employ a rebalancing algorithm that adjusts to market conditions through five operational states — Healthy, Over-Inventory, Under-Inventory, High Volatility, and Extreme Volatility — maximizing efficiency and minimizing risk (details below).</p><p><strong>Dual Vaults:</strong> Each V2 pool has two vaults, allowing for a more tailored approach to liquidity management, with a special exception made for SAUCE/HBAR and SAUCE/USDC pairs.</p><p class="block-img"><img src="https://images.prismic.io/saucerswap/aUAUP3NYClf9oMbG_image-5-.webp?auto=format,compress" /></p><p><strong>LARI</strong>: Participation in Auto Pools qualifies for LARI rewards, making liquidity providers (LPs) eligible for heightened rewards based on the vault’s liquidity management efficiency, the depositor’s share, deposit duration, and the LARI weight of the underlying pool.</p><h2><strong>Operation and Mechanism of Auto Pools</strong></h2><p>Auto Pools simplify the liquidity provision process in SaucerSwap V2 by allowing LPs to deposit a single asset into a vault. Upon deposit, LPs receive fungible ERC-20 LP tokens, representing their share of the vault. These assets are strategically deployed into SaucerSwap V2 concentrated liquidity pools, with Auto Pools adjusting positions based on market conditions to optimize fee earnings and reduce the risk of impermanent loss.</p><p>LPs earn trading fees from the pools’ activities and can experience potential appreciation of their assets. The protocol ensures flexibility, allowing for the withdrawal of the initial deposit and any accrued earnings at any time.</p><p>Auto Pools apply a 14% management fee on earned fees, distributed to ICHI Protocol and related entities.</p><p>The heart of Auto Pools lies in its dynamic rebalancing strategy, crafted to navigate market movements effectively. The vaults adapt through five operational states — Healthy, Over-Inventory, Under-Inventory, High Volatility, and Extreme Volatility — each tailored to optimize performance and mitigate risk.</p><ul><li><strong>Healthy</strong>: Aimed at maintaining an optimal balance between the deposit and paired tokens to ensure stable returns. Example composition: 20% paired token / 80% deposit token.</li><li><strong>Over-Inventory</strong>: Triggers when excess deposit tokens accumulate, prompting a strategy to sell the deposit token and return to a healthy state. Example composition: 12% paired token / 88% deposit token.</li><li><strong>Under-Inventory</strong>: Triggers when excess paired tokens accumulate, prompting a strategy to sell the paired token and return to a healthy state. Example composition: 25% paired token / 75% deposit token.</li><li><strong>High Volatility</strong>: Differences between fast 5-min and slow 60-min time-weighted average prices (TWAPs), as well as between current price and fast TWAP is used to detect such price movements. The liquidity will be spread out into full range for both tokens. Example composition: 50% paired token / 50% deposit token.</li><li><strong>Extreme Volatility</strong>: In cases of severe market fluctuations, the protocol halts further deposits, requiring manual intervention for rebalancing.</li></ul><p class="block-img"><img src="https://images.prismic.io/saucerswap/aUAUvXNYClf9oMba_image-6-.webp?auto=format,compress" /></p><p>For a more in-depth explanation, see the <a href="https://docs.ichi.org/home/yield-iq/algorithm-design" target="_blank" rel="noopener noreferrer">ICHI docs</a>.</p><h2><strong>Conclusion</strong></h2><p>Auto Pools in SaucerSwap V2, developed in collaboration with ICHI, streamline liquidity provision. These vaults utilize a rebalancing algorithm to optimize capital allocation, enabling users to deposit a single token for automated liquidity management. Auto Pools aim to make concentrated liquidity more efficient, user-friendly, and powerful.</p>

Auto Pools, a feature of SaucerSwap V2 leveraging ICHI’s ‘Yield IQ’ for Active Liquidity Management (ALM), are launching in March 2024.

An overview of Auto Pools in SaucerSwap V2, explaining how automated liquidity management improves efficiency and user experience.

SaucerSwap | Enhancing V2 with Auto Pools

<p>The <a href="https://www.saucerswap.finance/bridge" target="_self" rel="noopener noreferrer">SaucerSwap Bridge</a> page brings cross-chain asset transfers directly onto the SaucerSwap interface. Powered by Squid and Axelar, the bridge connects <a href="https://hedera.com/" target="_self" rel="noopener noreferrer">Hedera</a> to 20+ blockchains, giving users a direct path to move cryptoassets onto Hedera and back.</p><h2>Why This Matters</h2><p>Axelar&#39;s integration with Hedera unlocks two specific capabilities worth highlighting. First, it&#39;s permissionless for token issuers: if you&#39;re a project that wants your token to be bridgeable, you can deploy it yourself directly at <a href="https://interchain.axelar.dev/" target="_self" rel="noopener noreferrer">interchain.axelar.dev</a> without going through a gated process. Second, it supports HTS (Hedera Token Service) tokens, meaning native Hedera assets can now move cross-chain. That opens the door for a much wider range of assets to become cross-chain over time.</p><p>Together, these capabilities make SaucerSwap a more open destination for capital across the broader ecosystem. With $46 million in TVL across V1 and V2 pools, easier access to external capital means tighter spreads, better execution, and stronger yields for liquidity providers — all without leaving the app.</p><h2>Powered by Squid and Axelar</h2><p>The bridge is built on two pieces of infrastructure: Squid, which handles routing, and Axelar, which handles security and cross-chain communication.</p><p><a href="https://www.axelar.network/" target="_blank" rel="noopener noreferrer">Axelar</a> is the foundation. It&#39;s a proof-of-stake blockchain with a dedicated validator set that reaches consensus on cross-chain messages, confirming that an asset was locked or burned on the source chain before it&#39;s released on the destination. Axelar isn’t a traditional bridge. It’s a programmable interoperability layer that cross-chain applications and infrastructure build on. Axelar connects leading blockchain ecosystems, has processed billions in cross-chain volume, and has undergone multiple independent security audits. Axelar&#39;s recent integration with Hedera connected the network to this broader ecosystem through a secure, programmable messaging layer.</p><p><a href="https://www.squidrouter.com/" target="_blank" rel="noopener noreferrer">Squid</a> is the routing layer that sits on top of Axelar. It determines the optimal path across liquidity pools and chains, handles the swap logic, and delivers the destination asset in a single transaction. Users do not need to manually swap to an intermediary token or coordinate multiple steps across chains.</p><h2>What this means in practice</h2><p>For traders, assets from other chains can be routed directly into Hedera-native tokens and traded on SaucerSwap in a single interface. Popular starting points include <a href="https://www.base.org/" target="_self" rel="noopener noreferrer">Base</a>, <a href="https://www.optimism.io/" target="_self" rel="noopener noreferrer">Optimism</a>, <a href="https://www.bnbchain.org" target="_self" rel="noopener noreferrer">BNB Chain</a>, and <a href="https://www.avax.network/" target="_self" rel="noopener noreferrer">Avalanche</a>. For liquidity providers, external capital can reach SaucerSwap pools more efficiently, deepening liquidity across the platform. For developers and integrators, Axelar and Squid offer a composable, audited foundation to build on as the Hedera DeFi ecosystem grows.</p><h2>Hedera: Built for What DeFi Needs</h2><p>Hedera&#39;s architecture makes it well-suited as a settlement layer for cross-chain activity. Fees are low and predictable, throughput is high, and transactions reach finality deterministically, meaning there is no probabilistic waiting period as with some other networks. Assets routed through the bridge arrive on a network where execution is reliable and costs are manageable. Hedera&#39;s governance council, a body of global organizations overseeing the network, also provides a layer of institutional accountability that is increasingly relevant as on-chain finance matures.</p><p>SaucerSwap has been building on these strengths since launch. The bridge integration removes the last major barrier for users who hold assets on other chains but want to access what SaucerSwap has to offer.</p><h2>Start Bridging</h2><p>The Bridge page is live. Head to the SaucerSwap app, navigate to Bridge, and bring your assets over from any chain you&#39;re starting from.</p><p>Follow us on <a href="https://x.com/SaucerSwapLabs" target="_self" rel="noopener noreferrer">X</a> and join the SaucerSwap <a href="https://discord.gg/BpZAGpzGfw" target="_self" rel="noopener noreferrer">Discord</a> to stay up to date.</p><p>Bridge now → <a href="https://www.saucerswap.finance/bridge" target="_self" rel="noopener noreferrer">saucerswap.finance/bridge</a></p>

SaucerSwap has launched a native bridge connecting Hedera to 25 blockchains, powered by Squid (routing) and Axelar (cross-chain security). The integration supports permissionless token bridging and HTS tokens, enabling traders, liquidity providers, and developers to move assets onto Hedera's low-fee, high-throughput network directly within the SaucerSwap interface.

SaucerSwap Labs Launches a Dedicated Bridge, Powered by Squid and Axelar

<p>SaucerSwap will be deploying a new router contract and making several changes to its front-end ahead of the Hedera Smart Contract Service (HSCS) security model update on July 11th 2023. Once these changes are in effect, users will be prompted to sign token approvals before swapping or providing liquidity. This will enhance user, dApp, and network security.</p><p><strong>Update</strong>: SaucerSwap has since published an instructional video that covers these front-end changes.</p><p><a href="https://www.youtube.com/watch?v=ahxkvKHni04" target="_blank" rel="noopener noreferrer">https://www.youtube.com/watch?v=ahxkvKHni04</a></p><h2>Background</h2><p>The HSCS combines Hedera’s third-generation native entity functionality with a highly optimized Ethereum Virtual Machine (EVM) called <a href="https://docs.hedera.com/hedera/core-concepts/smart-contracts/hyperledger-besu-evm" target="_blank" rel="noopener noreferrer">Hyperledger Besu EVM</a>. SaucerSwap smart contracts use this Besu EVM for executing transactions, and the resulting changes are stored in the Hedera-optimized Virtual Merkle Tree state. This integration ensures deterministic finality (versus probabilistic finality) of smart contract executions within 2–3 seconds and ensures that state changes are limited to smart contract functionality.</p><p>In HSCS <a href="https://github.com/hashgraph/hedera-services/releases/tag/v0.35.2" target="_blank" rel="noopener noreferrer">version 0.35.2</a> and older, the security model allowed for account key signatures provided at transaction time to authorize actions. This model enabled smart contracts to be delegatecalled to perform operations on behalf of another account, including Hedera Token Service (HTS) operations. The SaucerSwap dApp utilized this feature to sign approvals, also referred to as allowances, on behalf of users. This enhanced the user experience by combining multiple transactions into one atomic operation. However, this model had a vulnerability where unauthorized transactions could be carried out by bad actors. This network-level vulnerability was exploited in March 2023 via a <a href="https://hedera.com/blog/analysis-remediation-of-the-precompile-attack-on-the-hedera-network" target="_blank" rel="noopener noreferrer">precompile attack</a>.</p><p>In the new security model, account key signatures are no longer sufficient for authorizing contract actions. Therefore, users must now explicitly sign approvals before performing actions like swapping or providing liquidity.</p><p>For more information on the new HSCS security model, please visit <a href="https://hedera.com/blog/hedera-smart-contract-service-security-model-update" target="_blank" rel="noopener noreferrer">https://hedera.com/blog/hedera-smart-contract-service-security-model-update</a></p><h2><strong>Upgraded Router</strong></h2><p>SaucerSwap upgraded its UniswapV2 router contract to conform with the new HSCS model boundaries. Given that non-trivial modifications were made, SaucerSwap elected to have <a href="https://omniscia.io/" target="_blank" rel="noopener noreferrer">Omniscia</a> perform a new audit. Omniscia is a leading blockchain security firm, having worked with clients such as Convex Finance, Olympus, <a href="http://Fetch.ai" target="_blank" rel="noopener noreferrer">Fetch.ai</a>, and AllianceBlock. After an initial audit and subsequent remediation, Omniscia asserted that all exhibits have been adequately dealt with and the outputs of the finalized audit report have been properly addressed by the SaucerSwap core maintainers.</p><p>Link to Omniscia audit report: <a href="https://omniscia.io/reports/saucerswap-labs-router-implementation-64660c885d5517001401256c/" target="_blank" rel="noopener noreferrer">https://omniscia.io/reports/saucerswap-labs-router-implementation-64660c885d5517001401256c/</a></p><p></p><h2><strong>Changes to UI/UX</strong></h2><p>Once the new router is deployed to the mainnet, users will notice several UI/UX changes. One significant change is the requirement for users to sign approvals before performing DEX operations. SaucerSwap, in an effort to balance security and usability, offers two options to users: <em>one-time approvals</em> and <em>unlimited approvals</em>.</p><p>In the first option, which is selected by default, users need to sign an approval that matches the quantity of tokens involved in the transaction. This approval is specific to each transaction and must be repeated for future transactions.</p><p>The second option allows users to sign an “unlimited” approval equivalent to the maximum supply of the token. For example, an unlimited approval for the SAUCE token would be for 1 billion tokens. If a user then conducts cumulative transactions totaling 100 million SAUCE tokens, their new allowance would be 1 billion — 100 million = 900 million SAUCE tokens. This form of approval is effectively unlimited, as it accommodates any number of transactions.</p><p>SaucerSwap has introduced a new modal that provides a convenient overview of queued transactions. Let’s consider an example where a user wants to swap 10 USDC for HSUITE. If HSUITE is not yet associated, the modal will display three pending transactions in a queue:</p><ol><li>Grant approval for 10.00 USD Coin</li><li>Associate Token HbarSuite</li><li>Swap USD Coin for HbarSuite</li></ol><p class="block-img"><img src="https://images.prismic.io/saucerswap/aUANCnNYClf9oMV-_1_kuQMvrQB_P8TBqZws-N6ag.webp?auto=format,compress" /></p><p>To complete the swap, the user needs to sign each of these transactions in HashPack. However, if the user has already associated HSUITE and signed an unlimited approval for USDC, only one signature for the swap transaction would be required. In any case, the relevant transactions will be queued in the modal.</p><p>Additionally, users have the flexibility to manage and revoke their allowances at any time in <a href="https://www.hashpack.app/" target="_blank" rel="noopener noreferrer">HashPack</a>.</p><p></p><h2>Conclusion</h2><p>The July 11th 2023 HSCS update has a significant positive impact on user, dApp, and network security. The SaucerSwap core maintainers have promptly responded to these changes by modifying and re-auditing their implementation of the UniswapV2 router. Additionally, several enhancements have been made in the front-end to maintain a top-notch user experience.</p>

SaucerSwap will be deploying a new router contract and making several changes to its front-end ahead of the Hedera Smart Contract Service (HSCS) security model update on July 11th 2023.

Summary of a Hedera network security update and its impact on SaucerSwap, including protocol status and user considerations.

Hedera Network Security Update & SaucerSwap

<p>Having entered the final quarter of 2022, Hedera DeFi has begun a new chapter characterized by protocol advancements that leverage the native services of the network. A highly-anticipated, long-awaited feature for all Hedera users and enthusiasts is HBAR native staking. Herein, we will explain how SaucerSwap will allow users to participate in DeFi without missing out on native staking rewards or worrying about conventional AMM-related risks such as <a href="https://docs.saucerswap.finance/tokenomics/risks" target="_blank" rel="noopener noreferrer">impermanent loss</a>.</p><p>We are of course talking about single-sided staking. In this model, yield is derived from three distinct sources: swap fees across all SaucerSwap liquidity pools, yield farm emissions, and HBAR native staking rewards. This latter reward mechanism involves dynamically staking all HBAR in the <a href="https://docs.saucerswap.finance/resources/saucer-contracts" target="_blank" rel="noopener noreferrer">WHBAR contract</a> to a permissioned node. Moreover, users can compound their earnings by staking xSAUCE (previously referred to as SAUCEr) in <a href="https://docs.saucerswap.finance/features/community-pools" target="_blank" rel="noopener noreferrer">Community Pools</a> to earn HTS tokens from projects incubated by <a href="https://headstarter.org/" target="_blank" rel="noopener noreferrer">HeadStarter</a>.</p><p>Users earn yield by providing liquidity for one type of asset, in contrast to liquidity providing on AMMs, which requires a pair of assets. In the case of SaucerSwap, users stake SAUCE in the Infinity Pool and receive a receipt token called xSAUCE. The ratio of xSAUCE to SAUCE begins at 1 and increases in perpetuity, as the Infinity Pool automatically compounds via SAUCE buybacks and farm emissions.</p><h2>How is yield generated?</h2><p>The 0.05% protocol fee incurred on all token swaps currently accumulates in an account called feeTo via <a href="https://uniswap.org/whitepaper.pdf" target="_blank" rel="noopener noreferrer">Uniswap v2</a> AMM smart contracts. This revenue goes to the DAO treasury at present, but will be reallocated to SAUCE buybacks in Mothership.sol (aka the Infinity Pool) once single-sided staking is implemented. The Brew contract is authorized to withdraw LP tokens from feeTo and burn them to itself, after which point it swaps the underlying assets (token 0 and token 1) for WHBAR and SAUCE using authorized user specified bridges, which are token addresses that facilitate the conversion to SAUCE. Once the bridge swaps are complete, the contract pulls its allocation of HBAR native staking rewards from a payment splitter. These HBAR are wrapped and added to the Brew contract’s WHBAR balance. The final swap to take place is a conversion of WHBAR to SAUCE, resulting in SAUCE being the only token in the Brew contract. This SAUCE, along with &lt;= 10% of SAUCE token emissions from the farm contract, is sent to the Infinity Pool.</p><p>Since the balance of SAUCE in the Infinity Pool is increasing in perpetuity, so too is the ratio of SAUCE to xSAUCE. Conversely, the relative value of xSAUCE to SAUCE is increasing. Consider the following example:</p><ul><li>User A is the first to stake SAUCE in the Infinity Pool. They deposit 10 SAUCE and receive 10 xSAUCE, as the initial ratio is 1:1.</li><li>Next, 10 SAUCE derived from swap fees, HBAR native staking rewards, and farm emissions is sent to the Infinity Pool. Since there is 20 SAUCE in the contract and 10 xSAUCE is the total supply, the ratio is now 1 xSAUCE : 2 SAUCE. User A can redeem their 10 xSAUCE for the 20 SAUCE at any time, based on this ratio.</li><li>Say User A does not redeem their xSAUCE. User B deposits 10 SAUCE in the pool and, since the ratio is 1:2, they get half of their deposit as xSAUCE, which would be 5 xSAUCE. Now the Infinity Pool contains 30 SAUCE and 15 xSAUCE, hence the ratio is maintained.</li><li>The ratio only changes as SAUCE are sent to the Infinity Pool and distributed equally among all xSAUCE holders, because each xSAUCE becomes worth more SAUCE.</li></ul><h2>APR estimate</h2><p>The single-sided staking APR formula is as follows:</p><p class="block-img"><img src="https://images.prismic.io/saucerswap/aT_vc3NYClf9oMBN_0_K68Dhcpg7FdlLOi4.png?auto=format,compress" /></p><p>As of writing, there are ~251M SAUCE in circulation, ~125M (50%) of which is in liquidity pools and ~43M (17%) in protocol- and team-owned wallets. For the purposes of this exercise, assume the remaining ~82M (33%), currently in anonymous wallets, will be staked in the Infinity Pool. The daocut and farm weighting coefficients are set to 0.2 and 0.03, respectively. Finally, the 5-day averaged trading volume is ~$400k and there is ~132M HBAR in the WHBAR contract. The HBAR native staking APR is currently unknown, so a range of single-sided staking estimates will be calculated.</p><p class="block-img"><img src="https://images.prismic.io/saucerswap/aT_viXNYClf9oMBR_0_MzJPBvcpL0nOJm7i.png?auto=format,compress" /></p><p><strong>The low-end estimate is 17.60% and the high-end estimate is 37.73%.</strong> For comparison, xBOO and xSUSHI — SpookySwap and SushiSwap single-sided staking — yield 3.58% and 4.98%, respectively. Another interesting takeaway is the potential for SAUCE to become a buyback deflationary token, meaning the protocol could take it out of circulation (into the Infinity Pool) at a faster rate than it is being minted, or more specifically, distributed to users as LP farm rewards. In the above example, 105,846 SAUCE is sent to the Infinity Pool and 415,112 SAUCE is emitted from the farm contract each day. Inflation could therefore be reduced by 25% from day one. This deflationary effect will become more pronounced as HBAR liquidity and trading volume grow.</p><h2>Summary</h2><p>SaucerSwap’s single-sided staking model is unique for its triple reward structure and interplay with Community Pools. Not only does the Infinity Pool allow for impermanent loss-free liquidity provisioning, but it also enables participation in HBAR native staking and Community Pools. In terms of a release date, the SaucerSwap team is targeting Q4. As of right now, the single-sided staking contracts are being audited by Hacken and the front-end is in its final stages of development.</p><p>SaucerSwap links: <a href="https://barracuda.io/saucerswap" target="_blank" rel="noopener noreferrer">https://barracuda.io/saucerswap</a></p>

An introduction to single-sided staking on SaucerSwap, explaining mechanics, rewards structure, and benefits for users and LPs.

An Introduction to Single-Sided Staking on SaucerSwap

<p>With 2022 coming to a close, we take this opportunity to look back at the achievements and strides SaucerSwap and the Hedera DeFi ecosystem have made, and we outline how this momentum will be carried into the New Year.</p><p>Hedera was comparatively late in entering the world of decentralized finance, having only recently pivoted from a solely enterprise-focused strategy with the launch of a new initiative — the <a href="https://hedera.com/blog/hedera-governing-council-to-allocate-5-billion-in-hbar-to-independent-foundation-and-ecosystem-development-initiatives" target="_blank" rel="noopener noreferrer">HBAR Foundation</a>. This funding mechanism, coupled with the network’s high performance; aBFT-grade security; and low, predictable fees; makes the subsequent influx of new developers and users of little surprise.</p><p>Q1 of 2022 marked the launch of <a href="https://hedera.com/blog/smart-contracts-2-0-live-on-mainnet" target="_blank" rel="noopener noreferrer">Smart Contracts 2.0</a>. Prior to this, smart contract applications were not practically feasible. This upgrade made smart contracts more robust and able to be integrated with the Hedera Token Service. The first protocol to launch following this upgrade was <a href="https://www.hbarfoundation.org/blog-post/stader-labs-to-launch-on-hedera-with-support-from-the-hbar-foundation" target="_blank" rel="noopener noreferrer">Stader Labs</a> — a multi-chain liquid staking protocol (aggregate TVL = $88MM).</p><p>Following Stader’s success, SaucerSwap began developing a constant product AMM protocol, collaborating with the Hedera core team to pioneer a <a href="https://www.saucerswap.finance/whitepaper.pdf" target="_blank" rel="noopener noreferrer">heavily-modified Uniswap v2 fork</a> wherein HSCS upgrades allow smart contracts to use HTS through EVM precompiles. During this time, the SaucerSwap team held a successful funding round and TGE, raising 10MM HBAR. In July of 2022, the HBAR Foundation announced its <a href="https://www.hbarfoundation.org/blog-post/the-hbar-foundation-announces-its-support-of-saucerswap-the-decentralized-exchange-built-on-hedera" target="_blank" rel="noopener noreferrer">support and partnership</a> with SaucerSwap, which was realized as a 20MM HBAR grant distributed to users as liquidity mining incentives. Finally, after undergoing a comprehensive <a href="https://docs.saucerswap.finance/resources/audits" target="_blank" rel="noopener noreferrer">audit</a> (9.7/10) and conducting a public beta on testnet, SaucerSwap launched in early August.</p><p>The launch of SaucerSwap marked the beginning of an interconnected DeFi ecosystem on Hedera. HTS tokens could now be swapped in a permissionless manner without counterparty risk, and users could earn passive income while retaining custody of their assets. As expected, the number of smart contract transactions increased significantly, as shown in the Messari <a href="https://messari.io/report/state-of-hedera-q3-2022" target="_blank" rel="noopener noreferrer">State of Hedera Q3 2022</a> report.</p><p class="block-img"><img src="https://images.prismic.io/saucerswap/aUAHPXNYClf9oMOu_image-5-.png?auto=format,compress" /></p><pre>The services with the largest gains were the Account Management / Crypto Service, the Smart Contract Service, and the Token Service. The increases were primarily due to the launch of the first decentralized exchange, SaucerSwap. [SaucerSwap] used the combination of these services to power the entire application.</pre><p>SaucerSwap quickly reached $15MM in TVL within one week of launch, with a significant portion of this attributed to cross-chain assets bridged through <a href="https://hashport-network.medium.com/hashport-turns-one-a-year-in-retrospect-99f3dc2bd676" target="_blank" rel="noopener noreferrer">hashport</a>. Despite the price of HBAR having decreased by ~50% since then, TVL continued rising to a high of $22MM in December. Additionally, SaucerSwap has facilitated nearly half a million unique swaps, amounting to over $80MM in total trade volume — this has generated nearly a quarter million dollars in revenue for liquidity providers and the DAO treasury. SaucerSwap also introduced a <a href="https://docs.saucerswap.finance/features/single-sided-staking" target="_blank" rel="noopener noreferrer">value capture mechanism</a> for SAUCE token holders. All 158MM HBAR in the WHBAR contract are staked to a node, and the accrued rewards are used to buyback SAUCE and distribute it to stakers.</p><h2>2022 Retrospective</h2><p>In 2022, SaucerSwap accomplished these milestones:</p><ul><li>Planck Epoch NFT sale and SAUCE TGE</li><li><a href="https://docs.saucerswap.finance/resources/audits" target="_blank" rel="noopener noreferrer">Audit of all smart contracts by Hacken</a></li><li><a href="https://www.hbarfoundation.org/blog-post/the-hbar-foundation-announces-its-support-of-saucerswap-the-decentralized-exchange-built-on-hedera" target="_blank" rel="noopener noreferrer">HBAR Foundation partnership and grant</a></li><li>Committed to a bi-weekly AMA schedule</li><li>Launch of AMM protocol and yield farms</li><li><a href="https://github.com/saucerswaplabs" target="_blank" rel="noopener noreferrer">Open-sourced core &amp; farm contracts</a></li><li>Integrated price feed for HTS tokens in <a href="https://www.hashpack.app/" target="_blank" rel="noopener noreferrer">HashPack</a></li><li><a href="https://analytics.saucerswap.finance/" target="_blank" rel="noopener noreferrer">Analytics for tokens and pools</a></li><li>Improvements to front- and back-end infrastructure</li><li>Powered in-wallet swaps for HashPack</li><li><a href="https://www.mexc.com/exchange/SAUCE_USDT" target="_blank" rel="noopener noreferrer">CEX listing on MEXC Global</a></li><li>SAUCE bridgeable to Ethereum, Polygon, BNB Chain, and Avalanche</li><li>SAUCE as a method of payment on <a href="https://www.hederasentient.com/" target="_blank" rel="noopener noreferrer">Hedera Sentient</a> marketplace &amp; launchpad</li><li>Strategic partnerships and formation of the HDA</li><li>Implementation of the <a href="https://sentinel.headstarter.org/" target="_blank" rel="noopener noreferrer">Sentinel program</a> with HeadStarter</li><li>Listed on data aggregators (<a href="https://defillama.com/protocol/saucerswap" target="_blank" rel="noopener noreferrer">DefiLlama</a>, <a href="https://www.coingecko.com/en/coins/saucerswap" target="_blank" rel="noopener noreferrer">CoinGecko</a>, <a href="https://coinmarketcap.com/currencies/saucerswap/" target="_blank" rel="noopener noreferrer">CMC</a>, <a href="https://dappradar.com/hedera/defi/saucerswap" target="_blank" rel="noopener noreferrer">DappRadar</a>)</li><li><a href="https://medium.com/@SaucerSwap/saucerswap-whbar-migration-announcement-295e04b01d5e" target="_blank" rel="noopener noreferrer">Migration to WHBAR v2 to leverage native staking</a></li><li><a href="https://medium.com/@SaucerSwap/an-introduction-to-single-sided-staking-on-saucerswap-ad92cd816362" target="_blank" rel="noopener noreferrer">Launch of SAUCE single-sided staking and xSAUCE token</a></li><li>Grew community to +25k members across <a href="https://barracuda.io/saucerswap" target="_blank" rel="noopener noreferrer">socials</a></li><li><a href="https://medium.com/@SaucerSwap/saucerswap-amended-token-listing-and-classification-9c517d876128" target="_blank" rel="noopener noreferrer">Streamlined token listing process and classification system</a></li><li>Expanded the team</li><li>Migration to <a href="https://www.lworks.io/" target="_blank" rel="noopener noreferrer">LedgerWorks</a> Sentinel</li><li><a href="https://www.coingecko.com/en/exchanges/saucerswap-dex" target="_blank" rel="noopener noreferrer">DEX integration on CoinGecko</a></li></ul><h2>2023 Prospective</h2><p>Now that these items have been delivered, the following core goals will inform development in the new year:</p><ul><li>Expand moat within Hedera and cross-chain</li><li>Further transparency and autonomy through a governance process</li><li>Adapt tokenomics to current DeFi narratives</li><li>Increase / diversify revenue streams</li><li>Optimize capital efficiency</li><li>Rework UX to onboard new users</li><li>Provide more insight and functionalities to users</li><li>Maximize cross-chain market exposure</li></ul><p><strong>While it is too early to announce our primary focus for 2023</strong>, we do have the following items on our <a href="https://docs.saucerswap.finance/roadmap#ongoing" target="_blank" rel="noopener noreferrer">roadmap</a>:</p><ul><li>MetaMask integration [Q1]</li><li>Front-end bridge integration [Q1]</li><li>Website redesign, including charts and user-tailored data [Q1]</li><li>Governance</li><li>Community Pools</li><li>Farm v2</li><li>Partnerships / collaborations with cross-chain protocols</li><li>Additional CEX listings</li></ul><p>The SaucerSwap team would like to express our gratitude to everyone who has supported the protocol’s development and growth in 2022. Happy New Year!</p>

With 2022 coming to a close, we take this opportunity to look back at the achievements and strides SaucerSwap and the Hedera DeFi ecosystem have made, and we outline how this momentum will be carried into the New Year.

A recap of SaucerSwap’s 2022 milestones covering product launches, protocol growth, ecosystem progress, and priorities heading into 2023.

2022 Retrospective and a Glance Ahead

<p>SaucerSwap V2 is scheduled to launch on the date of this publication: Friday, November 17th at 21:30 UTC / 16:30 ET. This upgrade introduces a concentrated liquidity market maker (CLMM) protocol, an overhauled web-app, MetaMask support, an updated tokenomics model, and the Liquidity-Aligned Reward Initiative (LARI).</p><ul><li>V2 liquidity provision opens at 21:30 UTC</li><li>Phase I of the updated tokenomics model is enacted between 21:30 and 23:30 UTC</li><li>Epoch 1 of LARI commences at 23:30 UTC</li><li>Swapping in V2 pools is enabled at 23:30 UTC</li></ul><h2>Concentrated Liquidity</h2><p>The key innovation in SaucerSwap V2 is concentrated liquidity. Unlike in V1, where liquidity is uniformly distributed across all possible prices (0, ∞), concentrated liquidity allows liquidity providers (LPs) to allocate capital within specified price ranges. For example, LPs can focus their capital around the peg of a stablecoin pair like USDC/USDT, leading to more efficient capital use and increased fee earnings.</p><p>Each liquidity position is uniquely represented by a non-fungible token (NFT). The flexibility of setting multiple positions means LPs can adapt to market conditions more effectively, concentrating their liquidity where it’s most likely to be utilized, and thus maximizing fee earning potential.</p><p>Key advantages include:</p><ul><li>LPs have the capacity to provide liquidity with <em>up to 4,000x capital efficiency</em> in comparison to SaucerSwap V1, thus receiving elevated fee earnings on their capital.</li><li>Capital efficiency allows for trades to be executed with greatly reduced price impact in comparison to both centralized exchanges and stablecoin-focused AMMs.</li><li>LPs have the opportunity to increase their exposure to desired assets and mitigate their downside risk.</li><li>LPs have the ability to trade one asset for another by depositing liquidity into a price range entirely above or below the current spot price, emulating a fee-earning limit order that executes along a smooth curve.</li></ul><p>A more comprehensive list of unique advantages can be found in the SaucerSwap <a href="https://docs.saucerswap.finance/#unique-advantages" target="_blank" rel="noopener noreferrer">documentation</a>.</p><p>V2 offers a multi-tiered fee structure, allowing LPs to be appropriately compensated for taking on varying degrees of risk.</p><p class="block-img"><img src="https://images.prismic.io/saucerswap/aUAPV3NYClf9oMXO_image-2-.webp?auto=format,compress" /></p><ul><li><strong>0.05% — Highly stable pairs:</strong> These are typically stablecoin pairs where both assets aim to peg their value to an external stable source, like the U.S. dollar.</li><li><strong>0.15% — Moderately stable pairs:</strong> These can be a combination of a stablecoin and a relatively less volatile cryptocurrency. Their price can fluctuate, but not as wildly as more exotic pairs.</li><li><strong>0.30% — Volatile pairs:</strong> Token pairs that have notable price swings within short time frames, but they are relatively well-known or have larger market caps.</li><li><strong>1.00% — Highly volatile pairs:</strong> These pairs might include new or less-known tokens. Their prices can be highly unpredictable, and they often come with higher risk of impermanent loss.</li></ul><p>Finally, traders are charged a fee based on the pool’s fee tier. As with SaucerSwap V1, 5/6 of the collected fee is allocated to LPs, and the remaining 1/6 is directed to the protocol. The protocol’s share is used for SAUCE token buybacks. The repurchased tokens are then distributed among the DAO and as rewards for single-sided staking. Unlike V1, LPs are rewarded directly in the tokens that constitute the pool. For example, if liquidity is provided to a USDC/HBAR pool, rewards are claimed as USDC and HBAR.</p><p>For a deeper understanding of concentrated liquidity, refer to the SaucerSwap <a href="https://docs.saucerswap.finance/protocol/saucerswap-v2" target="_blank" rel="noopener noreferrer">documentation</a>.</p><h2>Revamped Web-App</h2><p>The SaucerSwap <a href="https://www.saucerswap.finance/" target="_blank" rel="noopener noreferrer">web-app</a> has been completely redesigned to integrate both V1 and V2 functionality, along with analytics. The web-app introduces volatility strategies — preset price ranges specific to each fee tier, designed to suit various LP approaches for streamlined liquidity provision. It also introduces the depth chart, which is a graphical representation that displays the liquidity available in a specific pool across different price ranges. For guidance, consult the tutorials available in the SaucerSwap <a href="https://docs.saucerswap.finance/get-started/saucerswap-tutorials" target="_blank" rel="noopener noreferrer">documentation</a> or view them on <a href="https://www.youtube.com/@saucerswap" target="_blank" rel="noopener noreferrer">YouTube</a>.</p><h2>MetaMask Support</h2><p>MetaMask is fully integrated in the SaucerSwap web-app, enabling over 21 million daily active users to easily onboard and participate in Hedera DeFi for the first time ever. Furthermore, the core maintainers have added an HBAR faucet bot in the SaucerSwap <a href="https://discord.com/invite/saucerswap" target="_blank" rel="noopener noreferrer">Discord</a> server to optimize the onboarding flow. More details can be found in the SaucerSwap <a href="https://docs.saucerswap.finance/get-started/hedera-guide/wallet-creation#metamask" target="_blank" rel="noopener noreferrer">documentation</a>.</p><h2>Updated Tokenomics Model</h2><p>The issuance rate of new SAUCE tokens will decrease by 60% across a six-week period after the launch of SaucerSwap V2. This adjustment extends the SAUCE release schedule from 3 to 6 years, starting from August 2022. This updated tokenomics model is enabled by heightened capital efficiency of the CLMM, which is expected to boost trading volume and, consequently, fee generation for LPs. As a result, LPs will be less reliant on inflation-driven yields.</p><p>The SAUCE token’s inflation rate reduction and its reallocation in the updated tokenomics model are structured as follows:</p><p><strong>Current:</strong></p><ul><li>Total mint rate: 317.10 SAUCE / min</li><li>Emitted to yield farmers (V1 incentives): 288.27 SAUCE / min</li><li>Emitted to devcut: 28.83 SAUCE / min</li><li>Emitted to DAO + LARI (V2 incentives): 0.00 SAUCE / min</li></ul><p><strong>Phase I (0–3 weeks):</strong></p><ul><li>20% reduction in inflation compared to current level</li><li>Total mint rate: 253.68 SAUCE / min</li><li>Emitted to yield farmers: 175.13 SAUCE / min</li><li>Emitted to devcut: 23.06 SAUCE / min</li><li>Emitted to DAO + LARI: 55.49 SAUCE / min</li></ul><p><strong>Phase II (3–6 weeks):</strong></p><ul><li>40% reduction in inflation compared to current level</li><li>Total mint rate: 190.26 SAUCE / min</li><li>Emitted to yield farmers: 117.47 SAUCE / min</li><li>Emitted to devcut: 17.30 SAUCE / min</li><li>Emitted to DAO + LARI: 55.49 SAUCE / min</li></ul><p><strong>Phase III (6 weeks and onwards):</strong></p><ul><li>60% reduction in inflation compared to current level</li><li>Total mint rate: 126.84 SAUCE / min</li><li>Emitted to yield farmers: 59.82 SAUCE / min</li><li>Emitted to devcut: 11.53 SAUCE / min</li><li>Emitted to DAO + LARI: 55.49 SAUCE / min</li></ul><p>This updated tokenomics model is more sustainable, ensuring the longevity of the SaucerSwap protocol as Hedera continues to gain adoption. For more information, please see the tokenomics section of the SaucerSwap <a href="https://docs.saucerswap.finance/tokenomics/overview" target="_blank" rel="noopener noreferrer">documentation</a>.</p><h2>Liquidity-Aligned Reward Initiative (LARI)</h2><p>While SaucerSwap V2 has the potential to generate higher real yields for LPs, token incentives remain vital for bootstrapping liquidity, broadening the distribution of the SAUCE token, and reinforcing protocol governance.</p><p>The Liquidity-Aligned Reward Initiative (LARI) offers LPs token incentives for efficient liquidity contributions. This system addresses certain limitations of the SaucerSwap V1 yield farm. Notably, the obligatory staking of LP tokens, which transfers LP custody, is not optimal. Moreover, it is inefficient to reward LPs without accounting for their relative performance. Every reward token, such as SAUCE or HBAR, should not only incentivize liquidity, but also ensure its optimal use, with rewards reflecting this objective.</p><p>LARI addresses these design shortcomings. LPs do not have to stake their liquidity position NFTs to begin earning token incentives. Once an LP provides liquidity to a V2 pool, LARI is activated for their position. Furthermore, rewards are automatically distributed at the end of each 2-week reward period, or ‘epoch,’ greatly simplifying the UX and optimizing for gas efficiency.</p><p>Unlike the SaucerSwap V1 yield farm, which only supports SAUCE and HBAR rewards, LARI can be configured to emit any number of HTS tokens for each pool. This enables projects to tailor campaigns for their liquidity pools, rewarding LPs with their protocol token.</p><p>As a recap, the system functions by recording on-chain events and calculating rewards based on the duration a position remains within the range of the active tick. Rewards accumulate only while the position’s liquidity is in-range. At the conclusion of each 2-week epoch, participants automatically receive their rewards through an airdrop. A more detailed explanation can be found in the SaucerSwap <a href="https://docs.saucerswap.finance/protocol/saucerswap-v2#liquidity-aligned-reward-initiative-lari" target="_blank" rel="noopener noreferrer">documentation</a>.</p><p>The entire ‘DAO + LARI’ allocation of emissions (55.49 SAUCE / min) will go towards LARI for the first four epochs (8 weeks). For subsequent epochs, half the allocation will go towards LARI, while the other half is retained by the DAO for future use.</p><p class="block-img"><img src="https://images.prismic.io/saucerswap/aUAPxXNYClf9oMXu_image-3-.webp?auto=format,compress" /></p><h2>V2 Pools and LARI Weights</h2><p>The initial set of V2 pools and their LARI weights for Epoch 1 (Nov 17th 23:30 UTC — Dec 1st 23:30 UTC) are as follows:</p><p class="block-img"><img src="https://images.prismic.io/saucerswap/aUAP-XNYClf9oMX6_image-4-.webp?auto=format,compress" /></p><p>The initial selection of V2 pools, and their associated LARI weights, has been carefully chosen to reduce liquidity fragmentation and enhance trading volume. This approach also ensures an appropriate pairing of tokens with their respective fee tiers and aligns incentives efficiently. As a reminder, the introduction of additional V2 pools will be subject to votes by the DAO.</p><h2>V1 Farm</h2><p>During phase I of the updated tokenomics, farm rewards for certain V1 pools will end. Specifically, the pools affected are USDC[hts]/USDC, USDC[hts]/USDT[hts], and USDC[hts]/DAI[hts], as the majority of stablecoin liquidity is expected to migrate to V2. The revised farm weights, which will be implemented on November 17th between 21:30 and 23:30 UTC, can be found in the SaucerSwap <a href="https://docs.saucerswap.finance/protocol/saucerswap-v1/farm-weights" target="_blank" rel="noopener noreferrer">documentation</a>.</p><h2>Conclusion</h2><p>SaucerSwap V2 is scheduled for launch on the date of this publication, November 17th at 21:30 UTC / 16:30 ET, introducing a suite of enhanced features including a CLMM protocol and the Liquidity-Aligned Reward Initiative (LARI). Swapping in V2 pools will commence at 23:30 UTC, a strategic two-hour delay post-launch to stabilize markets during the initial bootstrapping period. Simultaneously, LARI will activate, enabling in-range liquidity providers to start accruing rewards immediately, to be distributed at the end of the 2-week epoch. Finally, the liquidity provider reward rate, or <em>Fees APR</em>, will be displayed after 24 hours of data is collected, ensuring accuracy and reliability in the metrics displayed on the front-end.</p>

SaucerSwap V2 is scheduled to launch on the date of this publication: Friday, November 17th at 21:30 UTC / 16:30 ET.

Launch details for SaucerSwap V2, including concentrated liquidity, upgraded architecture, incentive design, and protocol enhancements.

SaucerSwap V2 Launch Details

<p>Dear SaucerSwap Community,</p><p>As part of our ongoing commitment to transparency and user safety, we want to provide important information about the SaucerSwap WHBAR contract and its intended use.</p><p>The SaucerSwap WHBAR contract was specifically designed and deployed as an internal protocol component for SaucerSwap operations. While it has functioned reliably within our ecosystem since launch, we want to clarify its scope and important limitations for the broader community.</p><h2>Key Points</h2><h3>Within SaucerSwap</h3><p><strong>Fully Functional</strong> — All WHBAR functionality within the SaucerSwap protocol remains secure and operates as intended. Users can continue to swap, provide liquidity, and interact with WHBAR through our interface without any concerns.</p><h3>Ecosystem Context</h3><p>Due to SaucerSwap’s position as a leading DEX on Hedera, our WHBAR contract has become widely adopted across the ecosystem. The contract was originally engineered exclusively for SaucerSwap’s internal mechanisms, where our specific safeguards ensure secure operation.</p><p>We recognize and appreciate the many projects that have successfully integrated with our WHBAR implementation. These projects have often implemented their own protective measures (<a href="https://docs.saucerswap.finance/v/developer/whbar/overview" target="_blank" rel="noopener noreferrer">such as WhbarHelper contracts</a>) to ensure safe interactions. It’s important to note that without these protective measures, direct contract interactions can expose user funds to risk.</p><h3>Understanding the Risk</h3><p>For funds to be at risk, specific conditions must exist simultaneously:</p><ul><li>An account must have an open WHBAR allowance granted outside of an atomic transaction</li><li>The account must be actively holding WHBAR tokens</li><li>No protective mechanisms (like those used by SaucerSwap or <a href="https://docs.saucerswap.finance/v/developer/whbar/overview" target="_blank" rel="noopener noreferrer">WhbarHelper contracts</a>) are in place</li></ul><p>Within SaucerSwap and properly integrated third-party applications, these conditions are prevented through atomic bundling of operations. However, direct contract interactions without such safeguards can create these risk conditions.</p><p>This notice aims to help developers understand the importance of proper safety measures when working with the current implementation as the ecosystem evolves toward standardization.</p><h3>Recent Events</h3><p>We are aware of recent discussions regarding WHBAR contract interactions. Direct usage of the WHBAR contract by accounts which met the aforementioned risk conditions have exposed themselves to loss of funds. While we continue our investigation, we can confirm that the vulnerability described in this notice has existed since a 2023 network update.</p><p>Initial analysis suggests the impact is limited to a small number of accounts that directly interacted with the contract without proper safeguards. We are conducting a thorough review to determine the full scope and will provide updates as appropriate. Throughout this period, SaucerSwap users and properly integrated protocols have remained unaffected due to the protective measures in place.</p><p>For any developers who may have implemented direct contract interactions: our documentation has always specified the correct atomic bundling pattern required for safe usage. We encourage anyone who believes they may have been affected to contact us directly so we can assist in understanding what occurred.</p><h2>Action Required?</h2><h3>SaucerSwap: No Action Required by Users</h3><p>SaucerSwap retail users do not need to take any immediate action. Your funds and positions within SaucerSwap remain secure and unaffected.</p><h3>Bonzo Finance: No Action Required for Retail Users</h3><p>All funds and positions within the Bonzo Finance protocol remain secure and unaffected. Retail user accounts utilizing Bonzo Finance do not need to take any immediate action.</p><h3>Bonzo Finance: Action May Be Required for Liquidation Bot Operators / Developers</h3><p>If your developer accounts or contracts directly manages a balance of wHBAR issued by SaucerSwap’s wHBAR (0.0.1456986) contract, it’s strongly recommended to revoke any open allowances, if they exist. If not already implemented, please review and implement <a href="https://docs.saucerswap.finance/v/developer/whbar/overview" target="_blank" rel="noopener noreferrer">best practices for wHBAR usage</a> throughout your liquidation bot operations. Not following best practices has the potential to result in loss of wHBAR funds.</p><h3>Looking Forward</h3><p>To better align with ecosystem growth and standardization, SaucerSwap is committed to supporting the official Hashgraph ERC20 WHBAR standard. We will keep the community informed as ecosystem standards develop.</p><h2>What This Means</h2><ul><li><strong>Users trading, providing liquidity, or staking on SaucerSwap:</strong> No risk, no action needed</li><li><strong>Projects using WhbarHelper or similar protections:</strong> Currently safe, no action needed</li><li><strong>Direct contract integrations without protections:</strong> Immediate risk — <a href="https://docs.saucerswap.finance/v/developer/whbar/overview" target="_blank" rel="noopener noreferrer">migrate to WhbarHelper implementation immediately or discontinue use</a></li><li><strong>Users interacting with integrated protocols:</strong> Check with those protocols about their safety measures</li><li><strong>New projects:</strong> Do not integrate directly with SaucerSwap WHBAR — use <a href="https://hashscan.io/mainnet/contract/0.0.5808826" target="_blank" rel="noopener noreferrer">WhbarHelper</a> patterns or wait for ecosystem standards</li></ul><h2>For Developers</h2><p>We advise all developers and integration partners to:</p><ul><li><strong>New integrations:</strong> Do not use the SaucerSwap WHBAR contract directly — await the Hashgraph standard or implement <a href="https://docs.saucerswap.finance/v/developer/whbar/overview" target="_blank" rel="noopener noreferrer">WhbarHelper patterns</a> if absolutely necessary</li><li><strong>Existing integrations:</strong> Verify your safeguards are properly implemented or migrate to WhbarHelper immediately — contact our team if you need assistance</li></ul><p>We appreciate the patience and ingenuity of our ecosystem partners who have built on top of our infrastructure, and we remain committed to supporting the ecosystem’s evolution.</p><p>If you have any questions or concerns, please reach out to our team through our official channels.</p><p>Thank you for your continued trust and support.</p><p><strong>The SaucerSwap Labs Team</strong></p>

A security advisory addressing the WHBAR contract, outlining identified risks, mitigation steps, and guidance for affected users.

WHBAR Contract Security Advisory

<p>The Hedera network is fast, fair, secure, and well governed, which provides the trust layer that our ever-growing community relies on.</p><p>- Dr. Leemon Baird, inventor of the hashgraph</p><p></p><p>The use case of DeFi is clear and simple to the vast majority of market participants in the crypto space; namely, on-chain access to services traditionally offered by banks via trustless smart contracts. The general ethos revolves around a sort of libertarian right to self-sovereignty with a focus on egalitarianism. In theory, every individual may access these money markets using the same technology with complete transparency and no special advantage over the protocol. For money markets to be capital-efficient and attractive, they need high liquidity. <em>Go where the money is.</em> For now, this happens to be Ethereum.</p><p>Ignoring the highly fragile systems we have seen collapse in 2022, such as Terra and any number of protocols rebranding perpetual motion machines to a new crop of speculators, DeFi is here to stay. However, does it need to stay on Ethereum? Though protocols such as Aave or MakerDAO are sustainable, fair systems which have proven resilient to market volatility, the platform upon which they are currently housed is not as fair as it may seem.</p><p>DeFi on Ethereum is plagued by three problems: prohibitive costs, low throughput, and a lack of fair ordering (MEV). Take Curve for example; as of writing this, the cost of a token swap is $4.66. While this seems rather high, one should remember that this is relatively low when compared to historical data.</p><p class="block-img"><img src="https://images.prismic.io/saucerswap/aT_js3NYClf9oL2S_image-1-.png?auto=format,compress" /></p><p>Fee data and charts referenced from: The Block, On-Chain Metrics, Ethereum, June 2022</p><p>Fees on Ethereum are priced in <em>gwei.</em> Gwei is to Ethereum what <em>sats</em> are to Bitcoin <em>—</em> a fractional representation*.* When the price of ETH rises, so too does the U.S. dollar cost of transacting on the network, as can be seen when comparing the above Figure with the ETH/USD chart.</p><p class="block-img"><img src="https://images.prismic.io/saucerswap/aT_oT3NYClf9oL6m_1__IpkPHkvaBmuMB6iliByXg.webp?auto=format,compress" /></p><p>Fee data and charts referenced from: The Block, On-Chain Metrics, Ethereum, June 2022</p><p>Sharp rises in the price of ETH also correlate with demand for blockspace. This creates a negative feedback loop for users and protocols whereby demand effectively destroys itself by making the use of mainnet cost-prohibitive.</p><p>The variable nature of Ethereum’s transaction fees makes it difficult for developers to take costs into account when looking to build what is fundamentally a <em>business</em> on web3. No business owner wants unpredictable, wildly fluctuating expenses. There simply is not enough <a href="https://research.paradigm.xyz/ethereum-blockspace#overview-of-the-blockspace-market" target="_blank" rel="noopener noreferrer">blockspace</a> to run anything remotely similar to modern banking infrastructure. Ethereum runs at a maximum of 30 transactions per second. In comparison, Visa can run up to [65,000 transaction messages per second](<a href="https://www.visa.ca/en_CA/about-visa/visanet.html#:~:text=VisaNet%2520can%2520authorize%2520up%2520to,,%2520yen,%2520centavo%2520or%2520santang.)" target="_blank" rel="noopener noreferrer">https://www.visa.ca/en_CA/about-visa/visanet.html#:~:text=VisaNet%2520can%2520authorize%2520up%2520to,,%2520yen,%2520centavo%2520or%2520santang.)</a>.</p><p class="block-img"><img src="https://images.prismic.io/saucerswap/aT_oa3NYClf9oL6p_image-2-.png?auto=format,compress" /></p><p>Fee data and charts referenced from: The Block, On-Chain Metrics, Ethereum, June 2022</p><p>The technical limitations of Ethereum, coupled with its high demand for blockspace, give rise to DeFi’s third problem: miner extractable value. Abbreviated to MEV, miner extractable value consists of a live auction by market participants, each using Gwei to bribe miners to include and validate their transaction before another. This creates an arbitrage opportunity, which, if transactions were ordered fairly, would not have been possible. MEV ‘searchers’ (as they are called) typically profit from this <em>backdoor</em> arbitrage by front running large market orders and pocketing the difference.</p><p class="block-img"><img src="https://images.prismic.io/saucerswap/aT_ohXNYClf9oL62_1_p1Fk2S-O-uv3IWv6nPFuqQ.webp?auto=format,compress" /></p><p>Twitter user @bertcmiller shares a post with his following on June 13th with screenshots detailing profits generated by MEV bots taking advantage of an ETH whale market selling into a small (relative to his market order) liquidity pool. @bertcmiller’s post: <a href="https://twitter.com/bertcmiller/status/1536353430717046786/photo/1" target="_blank" rel="noopener noreferrer">https://twitter.com/bertcmiller/status/1536353430717046786/photo/1</a></p><p>Arbitrage is a normal and healthy part of any market; however, this kind of arbitrage sacrifices the fair ordering of transactions.</p><p>When developing SaucerSwap, we knew it had to be future-proof. A protocol which stood up against the rest of the market’s DeFi offerings, while also addressing the core problems users are growing increasingly tired of on Ethereum. The Hedera Hashgraph offers us and our users up to <a href="https://hedera.com/hbar" target="_blank" rel="noopener noreferrer">10,000 transactions per second</a> (throttled), alleviating our throughput concerns. Predictable fees paid in HBAR but denominated in U.S. dollars give us the freedom to explore ideas that would be impossible on other DLTs. Lastly, the concept of MEV does not exists on Hedera, meaning the network is free of bribes and exploitative backdoor arbitrage. The hashgraph always guarantees fair ordering of transactions; giving rise to a secure and fair network upon which next-generation dApps and protocols can be built.</p>

An analysis comparing Hedera and Ethereum for DeFi, examining performance, fees, security tradeoffs, and network design differences.

Hedera DeFi: Overcoming Ethereum

<p>With the advent of DeFi on Hedera, we have seen an overwhelming number of Hedera Token Service (HTS) tokens flood the ecosystem. When put into a broader context, this phenomenon is not uncommon — Ethereum, Binance Smart Chain, Avalanche, etc. all experienced a surge in token creation as they burgeoned into the now behemoth smart contract platforms.</p><p class="block-img"><img src="https://images.prismic.io/saucerswap/aT_tznNYClf9oL___0_L8cmhlNsroYbBemZ.png?auto=format,compress" /></p><p>Figure 1. Daily token transactions spiked in late August / early September amid the influx of HTS tokens on the network.</p><p></p><p>However, unlike these L1s, whose standards for fungible tokens implement an API within smart contracts, Hedera defines a new token standard independent of smart contracts. The Hedera Token Service, or HTS, leverages existing network primitives to allow users to define and interact with tokens as native network entities. HTS therefore inherits HBAR’s performance and predictable fee structures. These tokens are mappable to ERC-20 and ERC-721 standards such that interoperability with existing smart contract applications is not compromised. Moreover, HTS extends beyond the limitations of the dominating ERC standard, with features such as built-in configurable compliance and programmability (e.g., custom token fees and scheduled transactions).</p><p>This is all to say that token creation on Hedera is robust and accessible to all. While a low barrier to entry is generally good, it is not without drawbacks. The near-negligible cost of creating (<a href="https://docs.hedera.com/guides/mainnet/fees" target="_blank" rel="noopener noreferrer">$1.00</a>) and minting (<a href="https://docs.hedera.com/guides/mainnet/fees" target="_blank" rel="noopener noreferrer">$0.001</a>) fungible tokens through HTS, coupled with the permissionless nature of SaucerSwap and a tight-knit, easily mobilized community, can exacerbate rug pulls in the absence of checks and balances.</p><h2>Project Sentinel</h2><p>Given the aforementioned challenges, the Hashgraph DeFi Alliance (HDA) concluded that a <strong>formalized process for whitelisting tokens</strong> was needed. <a href="https://www.saucerswap.finance/" target="_blank" rel="noopener noreferrer">SaucerSwap</a> has collaborated with IDO launchpad and fellow HDA member, <a href="https://headstarter.org/" target="_blank" rel="noopener noreferrer">HeadStarter</a>, to conceive of Project Sentinel. HeadStarter has created a set of questions that examine various aspects of a project, ranging from business model to tokenomics.</p><p class="block-img"><img src="https://images.prismic.io/saucerswap/aT_uA3NYClf9oMAG_image.webp?auto=format,compress" /></p><p>Figure 2. A preview of the Project Sentinel questionnaire.</p><p>These questions were designed to be as objective as possible. In addition to responding yes or no, the project must provide supporting evidence for each question. For example, suppose a project responds ‘yes’ to having received an audit — for this to be verifiable, a link to the report must be provided. Upon submission, HeadStarter will generate a report, which will be published on the Project Sentinel <a href="https://sentinel.headstarter.org/" target="_blank" rel="noopener noreferrer">website</a>.</p><h2>SaucerSwap Voting</h2><p>Once a report has been published, the project may complete a token listing form, which SaucerSwap will add to their GitBook once HeadStarter begins processing requests. A poll will then be created in the SaucerSwap <a href="https://discord.com/invite/saucerswap" target="_blank" rel="noopener noreferrer">Discord</a> server. Those who have purchased one or more Planck Epoch Collectibles, either during SaucerSwap’s NFT sale or on a secondary market like <a href="https://zuse.market/" target="_blank" rel="noopener noreferrer">Zuse</a>, will have exclusive access to the voting channel once their account has been <a href="https://docs.saucerswap.finance/getting-started/obtain-hbar#account-linking" target="_blank" rel="noopener noreferrer">linked</a>. They may cast a vote on whether a project should be whitelisted, using Sentinel reports as reference.</p><p>If the project receives a passing vote by &gt;70% supermajority after 24 hours has elapsed:</p><ol><li>The project moves on to the final step in the whitelisting process.</li><li>The project’s team then has 48 hours to create a liquidity pool, in which $1,500 of their token and $1,500 of a common base (e.g., HBAR, SAUCE, USDC) is provided. This is primarily to minimize slippage when swapping in the trading pair.</li><li>If this LP is funded within the specified window of time, SaucerSwap will promptly whitelist the token.</li></ol><p>Whitelisted tokens appear in Saucerswap’s default token menu and <a href="https://analytics.saucerswap.finance/" target="_blank" rel="noopener noreferrer">analytics</a> section. This makes tokens more easily tradable and increases project visibility. It also allows users to analyze the tokens more readily using tools such as liquidity, volume, and price charts.</p><h2>Summary</h2><p>In light of Hedera’s emerging token economy, the HDA has deemed it necessary to introduce a responsible and inclusive method of verifying the legitimacy of projects, with the end goal being to whitelist quality tokens on SaucerSwap. HeadStarter will score a project using a set of criteria, after which point it will be voted on by SaucerSwap Planck Epoch NFT holders. Finally, on the condition that the project receives a passing vote by supermajority and has provided $3,000 of liquidity to the relevant pair, their token will be whitelisted on SaucerSwap.</p><h2>About the HDA</h2><p>The Hashgraph DeFi Alliance allows industry-leading projects to connect, collaborate, and contribute to the emergence of a healthy and sustainable global DeFi ecosystem built on Hedera.</p>

Details on the HeadStarter partnership with SaucerSwap, outlining token whitelisting criteria, listing process, and ecosystem implications.

HeadStarter x SaucerSwap: Token Whitelisting

<h2>Introduction</h2><p>As SaucerSwap solidifies its position as a leader in the decentralized finance space, our commitment to sustainable growth and community-driven governance remains unwavering. Reflecting on the progress made over the past months, this update not only highlights the expansion of the SaucerSwap DAO’s responsibilities but also introduces the upcoming implementation of an interface fee. These pivotal steps are part of a broader strategy to enhance the protocol’s long-term sustainability and governance framework, building on our past successes and setting the stage for future developments.</p><h2>Governance Update</h2><p>The SaucerSwap DAO, recently formed on-chain to govern key aspects of the protocol, has quickly expanded its responsibilities. Originally focused on managing V1 and V2 incentives, the DAO’s scope now includes treasury management, marking an important step in decentralized governance.</p><p>The SaucerSwap DAO now oversees:</p><ul><li><strong>V1 Farm Creation:</strong> Governing the creation of yield farms and adjusting SAUCE and HBAR emissions for existing farms.</li><li><strong>V2 Pool Creation:</strong> Managing V2 pool creation to prevent liquidity fragmentation and handle technical overhead. The DAO sets protocol fees and selects fee tiers.</li><li><strong>V2 LARI Campaigns:</strong> Approving and managing LARI campaigns, including setting campaign durations and token allocations.</li><li><strong>Tokenomics Changes:</strong> Approving significant changes to SAUCE tokenomics proposed by core maintainers.</li><li><strong>Treasury Management:</strong> Governing key treasury activities, including fee switches, HBAR staking rewards, protocol fees, and SAUCE buybacks. The DAO also manages liquidity, farming, and staking activities within SaucerSwap and other protocols.</li></ul><p>Furthermore, the DAO now controls several key accounts and contracts:</p><p><strong>V2 Incentives (Unallocated):</strong> Manages unallocated SAUCE incentives, directing them to the DAO treasury.</p><ul><li><strong>HBAR Staking Rewards:</strong> Adjusts allocations of staking rewards between Masterchef, the DAO treasury, and Brewsaucer.</li><li><strong>V1 and V2 Protocol Fees:</strong> Oversees the distribution of protocol fees for SAUCE buybacks, managing allocations to Mothership, SaucePaymentSplitter, and the DAO treasury.</li><li><strong>V2 Incentives (LARI):</strong> Curates and manages LARI campaigns, including project selection and reward allocation.</li><li><strong>V1 Incentives (Farm):</strong> Adjusts emission weights for V1 farm pools to ensure optimal distribution.</li></ul><p>This expansion of the DAO’s responsibilities ensures alignment between the diverse interests of SaucerSwap’s various community members — token holders, liquidity providers, traders, and others. By giving the community direct control over treasury management, SaucerSwap fosters a balanced and sustainable governance model that drives the protocol forward.</p><h2><strong>Introducing the SaucerSwap Interface Fee: A Step Towards Long-Term Sustainability</strong></h2><p>As SaucerSwap continues to evolve and grow within the DeFi ecosystem, we’re taking a significant step towards ensuring the long-term sustainability of our protocol. Today, we’re announcing the implementation of an interface fee, a strategic move that aligns with industry standards and positions SaucerSwap for continued success and development.</p><h3><strong>The Interface Fee: What You Need to Know</strong></h3><p>Starting on Monday, August 19th, 2024, SaucerSwap will introduce a 0.4% interface fee on certain swap routes. This fee will apply to both v1 and v2 of our protocol and will be implemented specifically for trades executed through the SaucerSwap front-end interface (i.e., <a href="https://saucerswap.finance" target="_blank" rel="noopener noreferrer">https://saucerswap.finance</a>).</p><p>It’s important to note:</p><ul><li>This fee is specific to the saucerswap.finance interface and does not apply to other platforms or aggregators that might interact with SaucerSwap’s smart contracts.</li><li>The fee will only be applied when swapping to the following output tokens: HBAR, HBARX, USDC, USDC[hts], USDT[hts], DAI[hts], WBTC[hts], WETH[hts]</li><li>The fee is calculated based on the output amount. Mechanistically, the router contract receives the full output amount, sends 0.4% (0.004 * amount) to the fee collector, and transfers the remaining 99.6% to the user.</li><li>All stablecoin-to-stablecoin swaps will remain exempt from this interface fee. For this purpose, stablecoins include USDC, USDC[hts], USDT[hts], and DAI[hts].</li><li>This fee is separate from the 0.3% swap fee for trades in SaucerSwap v1 (which applies to all pools) and from the variable fee tier in SaucerSwap v2. Those fees are imposed at the core contracts, while the interface fee is set in the router contract, which is a periphery contract.</li></ul><h3><strong>Driving Sustainability and Development</strong></h3><p>This interface fee represents a crucial step in SaucerSwap’s journey towards self-sufficiency. As we approach the end of SAUCE token vesting in a few years, when the maximum supply will equal the circulating supply, it’s essential that we establish sustainable funding mechanisms for ongoing operations and development.</p><p>The introduction of this fee will:</p><ol><li>Reduce reliance on the SAUCE token for funding development and operations</li><li>Create a direct link between protocol utilization and revenue generation</li><li>Ensure continued development and improvement of the SaucerSwap platform</li></ol><p>The revenue generated will go to SaucerSwap Labs to fund ongoing development and operations. Specifically, this revenue will sustain operations by paying for infrastructure costs, development, marketing, and other expenses incurred by SaucerSwap Labs in the maintenance and development of the SaucerSwap interface.</p><h3><strong>Balancing User Experience with Protocol Health</strong></h3><p>We understand that introducing a fee impacts our users, and this decision was not made lightly. To maintain transparency:</p><ul><li>This fee is specifically for using the SaucerSwap interface on saucerswap.finance.</li><li>It is separate from any existing swap fees or fees charged by other platforms (e.g., HashPack, ETASwap) that might interact with SaucerSwap’s liquidity.</li><li>Users interacting directly with SaucerSwap’s smart contracts through other means will not incur this specific interface fee.</li></ul><p>Because liquidity providers and users of the SaucerSwap protocol rely on a well-maintained interface and a strong development team scaling the protocol, this interface fee directly supports those goals which directly impact users. By ensuring the long-term sustainability of the platform, we can continue to provide a robust, reliable, and innovative DeFi experience for our community.</p><h3><strong>Industry Standard, Proven Success</strong></h3><p>The implementation of an interface fee is not unprecedented in the DeFi space. Uniswap, a leader in the industry, introduced a similar fee structure which has proven to be a successful model for sustainable protocol development.</p><p>Our goal has always been to create a self-sustaining, robust protocol that can thrive independently of token emissions. This interface fee on saucerswap.finance is a critical component in achieving that vision. The revenue generated will go to SaucerSwap Labs to fund ongoing development and operations, ensuring that we can continue to innovate and serve our community for years to come.</p><h2><strong>Looking Ahead</strong></h2><p>Looking ahead, several significant initiatives are set to shape the future of SaucerSwap. These include the continuation of LARI campaigns and THF ‘Spring Incentives’, phases II and III of single-sided staking, a front-end bridge integration, further UI/UX development, LARI 300, and the delegation of voting power to DAO participants. Many of these initiatives are nearing completion and have strategic overlaps.</p><p>For instance, the HBAR granted through the THF Spring Incentives campaign is being leveraged to incentivize bridged liquidity, thereby accelerating Hedera’s adoption within the broader crypto community. Delegative governance will allow proposals to be submitted anonymously, eliminating the proposer’s need to meet the 100k SAUCE threshold for account funding. It also empowers passive users by enabling them to delegate their voting power to a trusted representative.</p><p>Details on LARI 300 are forthcoming, but this initiative is expected to streamline the onboarding process for projects wishing to list on SaucerSwap’s primary front-end while also improving the user experience for traders and liquidity providers managing their assets within the web app. Lastly, phases II and III of single-sided staking will become a central focus once these other initiatives are completed. This extension of the current staking system will streamline the onboarding of new projects to the ecosystem, while giving xSAUCE and Planck Epoch Collectible (PEC) NFTs additional use cases. More details will be provided as this initiative progresses.</p><p>As SaucerSwap continues to evolve, these initiatives underscore the protocol’s commitment to innovation and community-driven growth. By integrating new features and expanding governance capabilities, SaucerSwap is well-positioned to remain at the forefront of decentralized finance, offering a robust and dynamic platform for all participants.</p><h2>Summary of Article</h2><p>These initiatives represent crucial steps in SaucerSwap’s evolution, solidifying our path toward a more sustainable and community-driven protocol. By expanding the DAO’s responsibilities and introducing the interface fee, we are taking practical measures to secure the protocol’s future. As we prepare for the developments ahead, our priority remains clear: to support our community and maintain SaucerSwap’s position as a robust and adaptable player in the DeFi ecosystem.</p>

As SaucerSwap solidifies its position as a leader in the decentralized finance space, our commitment to sustainable growth and community-driven governance remains unwavering.

A development update covering SaucerSwap’s Summer 2024 progress, including protocol upgrades, infrastructure work, and roadmap highlights.

SaucerSwap Summer 2024 | Development Report

<p>Currently, there are two types of tokens tradeable on SaucerSwap: whitelisted tokens that appear in the default menus and analytics, and all other HTS tokens, which are imported into token menus in a fully permissionless manner. There are some pain points associated with this current method of verification. For example, projects must complete a Sentinel report, fill out a token listing request form, wait for the community to vote on their token, and finally, meet a liquidity requirement. This is not a good fit for all projects, and as such, three new classes of tokens are being introduced:</p><h2><strong>1. Default</strong></h2><p>Characteristics:</p><ul><li>Appears in default menusi. No disclaimer</li><li>Appears in analyticsi. No disclaimer</li><li>Listing announcement from SaucerSwap on Twitter</li><li>Eligible for listing on data aggregators (CoinGecko, CMC)</li><li>Price APIi. Token price displays in HashPack and other applications</li></ul><p>Criteria:</p><ul><li><a href="https://sentinel.headstarter.org/" target="_blank" rel="noopener noreferrer">HeadStarter Sentinel report</a></li><li>SaucerSwap request form</li><li>Passing community vote (&gt;50%)</li><li>Minimum $10k token liquidity</li></ul><h2><strong>2. Extended</strong></h2><p>Characteristics:</p><ul><li>Appears in default menusi. User prompted with “Caution” disclaimer</li><li>Appears in analyticsi. User prompted with “Caution” disclaimer</li><li>Eligible for listing on data aggregators (CoinGecko, CMC)</li><li>Price APIi. Token price displays in HashPack and other applications</li></ul><p>Criteria:</p><ul><li>SaucerSwap request formi. Listing ETA is 48 hours</li></ul><h2><strong>3. Experimental</strong></h2><p>Characteristics:</p><ul><li>Does not appear in default menusi. Tokens must be imported by ID (e.g., 0.0.123456)ii. User prompted with “Warning” disclaimer</li><li>Does not appear in analytics</li><li>Price APIi. Token price displays in HashPack and other applications</li></ul><p>Criteria:</p><ul><li>No criteria; any HTS token can be imported, used to create a liquidity pool, and traded.</li></ul><p>In addition to this amended token listing procedure, projects can apply for yield farms after their token has been added to either the default or extended list. There will be a limit to how many farms a given token can receive, with this number generally being capped at two. A project can submit a new request form if it has one or more farms and wishes to incentivize an additional token pair. Once the SaucerSwap team has received a form, the decision will be brought to a community vote in the same manner as token listings. Note that the token must have a reasonable amount of liquidity and sustained trading volume for it to be considered for a farm. This is to ensure there is organic demand for the token without additional incentives. Liquidity and volume will be assessed on a case-by-case basis. All yield farms will receive dual token emissions (SAUCE and HBAR). Farm weights and initial listings will vary per project and will be governed via DAO-based token-weighted voting once it is phased in.</p><p>For collaboration, token listing, and farm inquiries, please complete the following request form:</p><p>Link to form: <a href="https://z30ev00547x.typeform.com/to/YBGqwGup" target="_blank" rel="noopener noreferrer">https://z30ev00547x.typeform.com/to/YBGqwGup</a></p><h2><strong>Summary</strong></h2><p>The addition of SaucerSwap’s Extended List removes the need for a Sentinel report, liquidity requirement, or community vote. As such, getting a token listed on SaucerSwap will have significantly less friction and be much quicker. This allows for a more permissionless nature of our DEX while embracing the previously established, more stringent process for tokens in our Default List. Please note that because of the single-sided staking rollout, we have a backlog of requests, which will be processed in the order they were received.</p>

SaucerSwap is amending its token listing procedure after receiving valuable feedback from the community. Furthermore, projects will have a seamless way to apply for yield farms and other collaborations.

An overview of SaucerSwap’s updated token listing standards and classification framework, including revised criteria and compliance considerations.

SaucerSwap Amended Token Listing and Classification

<h2>Market Update</h2><p>Hedera has experienced explosive growth in the first month of 2023. Not only has there been an uptick in network tps due to Avery Dennison’s <a href="https://hedera.com/users/atma-io" target="_blank" rel="noopener noreferrer">atma.io</a> use case going live, but we have also seen respectable growth in DeFi metrics, such as TVL and volume. As of Jan 22nd, there is $133M in TVL on Hedera, which includes Stader liquid staking but excludes PoS staking. Of this total, SaucerSwap has a 23% dominance, with $30.6M TVL. This marks a +57.72% monthly growth and +30.09% weekly growth in TVL, attributed mainly to the market rebound. In terms of volume, SaucerSwap has facilitated 530k trades, which amount to nearly $100M. The protocol’s volume is up +81.54% this past week alone as traders capitalize on recent volatility and ample arbitrage opportunities. Finally, SaucerSwap has recently ascended into the top 50 largest dexes by TVL, according to <a href="https://defillama.com/protocols/Dexes" target="_blank" rel="noopener noreferrer">DefiLlama</a>.</p><p class="block-img"><img src="https://images.prismic.io/saucerswap/aUAJpXNYClf9oMSo_image-6-.png?auto=format,compress" /></p><p>SaucerSwap volume has ramped up in 2023. Source: DeFiLlama</p><p></p><h2>Roadmap Update</h2><p>The SaucerSwap team published a <a href="https://medium.com/@SaucerSwap/2022-retrospective-and-a-glance-ahead-f5436332927f" target="_blank" rel="noopener noreferrer">retrospective</a> at the end of 2022, reflecting on the milestones achieved post-August launch and what the community can look forward to in the New Year. In this article, several core goals were stated:</p><ul><li><em>Expand moat within Hedera and cross-chain</em></li><li><em>Further transparency and autonomy through a governance process</em></li><li><em>Adapt tokenomics to current DeFi narratives</em></li><li><em>Optimize capital efficiency and transition to real yield incentives</em></li><li><em>Rework UX to onboard new users</em></li><li><em>Provide more insight and functionalities to users</em></li><li><em>Maximize cross-chain market exposure</em></li></ul><p>This article highlights several ways these goals will be accomplished in Q1 this year and beyond.</p><p></p><h3>SaucerSwap v2</h3><p>In the last AMA, it was announced that the team is working on a concentrated liquidity market maker (CLMM) as a means to increase capital efficiency. This upgrade paves the way for more profitable and risk-capped liquidity provision, along with low-slippage trade execution, and will reduce the protocol’s reliance on inflation-driven yields. The SaucerSwap community can expect feature parity with leading dexes on more established chains. Regarding this upgraded protocol, our core contributors have swap, mint, and burn functions working on the Hedera testnet, and the pool contract is nearly complete. The team will continue to provide updates as progress is made.</p><p>SaucerSwap v2 is still a ways out; however, another major release is just around the corner. This will include: MetaMask integration, front-end bridge integration, user analytics, and a website redesign.</p><p></p><h3>MetaMask &amp; Bridge</h3><p>MetaMask and bridge integrations achieve a common goal: onboard new users. As it currently stands, cross-chain users must create a new wallet to participate in Hedera DeFi. The ability to switch networks within MetaMask removes this pain point. Friction is further reduced by the fact that MetaMask users can then bridge assets directly to Hedera within SaucerSwap’s web app.</p><p>A significant portion of the $60B+ in DeFi is interacted with via MetaMask wallets (with over 30M MAUs, comprising 80–90% of all web3 users). Therefore, there is enormous value in seamlessly onboarding these users into the Hedera ecosystem. Given SaucerSwap’s clear benefits (e.g., fast txs w/ finality, predictable fees, no frontrunning, attractive yields, Larry), it stands to reason that the protocol will experience an influx of new users and liquidity as a direct consequence of these new front-end features.</p><p></p><h3>Website Redesign</h3><p>One of SaucerSwap’s core philosophies is good UI/UX. As such, the MetaMask &amp; bridge integrations will coincide with a full reimagining of the <a href="https://www.saucerswap.finance/" target="_blank" rel="noopener noreferrer">website</a>. This will include a top performers section on the landing page; real-time charts and statistics on the swap and liquidity pages; user-specific charts (e.g., account value), transactions, positions (e.g., tokens, pools, farms), and more on the portfolio page; various performance optimizations; and a revamped look. This breadth and granularity of data will streamline accounting and empower users who take trading and liquidity provision seriously.</p><p></p><h3>Insights &amp; Notifications</h3><p>In true SaucerSwap fashion, this user-tailored data will be taken a step further and introduce configurable insights and notifications. Here the power of Ledger Works’ <a href="https://www.lworks.io/product#Sentinel" target="_blank" rel="noopener noreferrer">Sentinel</a> will be harnessed, granting users the ability to subscribe to topics and allowing for the easy creation of notification streams. These notifications are customizable and can range from trading signals to security alerts, all in-app. These advanced features will be entirely optional, likely via a subscription-based model. Here, the subscription fee would be paid in SAUCE, which can then be redistributed to active participants of the protocol, thereby giving further utility to the token. Please note that insights and notifications are further down the pipeline and may not be included in the upcoming release.</p><p></p><h2>Conclusion</h2><p>As mentioned in our last update, this release will occur once Hedera’s <a href="https://docs.hedera.com/hedera/core-concepts/smart-contracts/json-rpc-relay" target="_blank" rel="noopener noreferrer">JSON-RPC relay</a> is production-ready, which is currently slated for Q1. In the meantime, we will continue to develop and test the features discussed in this article. Concurrently, our Solidity team is working on SaucerSwap v2 and will be joined by our full-stack team once the front-end features are in production.</p>

Hedera has experienced explosive growth in the first month of 2023.

January 2023 development update outlining product improvements, protocol changes, and ongoing initiatives across the SaucerSwap platform.

SaucerSwap Development Update | January 2023

<p>On Monday, June 3rd, SaucerSwap will launch the Spring Incentives Campaign in collaboration with <a href="https://www.hbarfoundation.org/" target="_blank" rel="noopener noreferrer">The HBAR Foundation</a>. This campaign, running for approximately three months with opportunity to extend, aims to boost liquidity, increase Hedera network participation, and reward the SaucerSwap community. The campaign will distribute a total of 23,125,000 HBAR through various initiatives, including liquidity rewards, network fee rebates, and a Discord faucet initiative. These efforts are designed to improve the health and efficiency of our protocol while supporting the ecosystem’s long-term growth and sustainability.</p><ul><li><strong>21,000,000 HBAR</strong> for liquidity rewards</li><li><strong>1,875,000 HBAR</strong> for network fee rebates</li><li><strong>250,000 HBAR</strong> for a faucet initiative</li></ul><h2>Liquidity Rewards</h2><h5>Farm</h5><p>A third of the liquidity rewards portion of the grant, 7,000,000 HBAR, is designated for yield farm rewards in V1 pools. Starting June 3rd, 1,073,971 HBAR will be distributed over the first two weeks, across 28 pools including new additions like HBAR/BSL and HBAR/DAVINCI. Each farm will receive dual token rewards in SAUCE and HBAR based on the weighting schema detailed in Table 1.</p><p class="block-img"><img src="https://images.prismic.io/saucerswap/aT_3VnNYClf9oMHB_image-3-.png?auto=format,compress" /></p><p>Table 1. Initial allocations of SAUCE and HBAR to V1 yield farms. DAO and LARI weights were added following enactment of the Tokenomics V2 proposal.</p><p>The focus will initially be on supporting pools containing Hedera-native and hashport-bridged tokens, with the potential to extend incentives to other native projects and bridges in the future. The total HBAR emission rate and individual farm weights will be re-evaluated after two weeks. If the boosted incentives achieve the anticipated TVL increase while assuming APRs equilibrate at their current levels, a 40% TVL increase for V1 is projected.</p><h5>Liquidity-Aligned Reward Initiative (LARI)</h5><p>Two-thirds of the liquidity rewards portion of the grant, 14,000,000 HBAR, will fund LARI rewards in V2 pools. Commencing June 3rd, 2,333,333 HBAR will be distributed in the first two weeks (Epoch 15). To grow the DAO’s strategic reserve and reduce inflation, the rate of SAUCE emissions to LARI will be reduced by a factor of one-third during the campaign. Despite this reduction in SAUCE emissions, APRs will increase across the board due to the added HBAR incentives, assuming constant TVL.</p><p>The campaign will initially support 28 pools, including new ones like HBAR/KARATE 0.30% and HBAR/PACK 0.30%. Each V2 pool will receive dual token rewards in SAUCE and/or HBAR as per the weighting schema in Table 2.</p><p class="block-img"><img src="https://images.prismic.io/saucerswap/aT_3yHNYClf9oMHN_image-4-.png?auto=format,compress" /></p><p>Table 2. Epoch 15 (June 3rd — 17th) allocations of SAUCE and HBAR to V2 pools via LARI. Note that project-specific token incentives (e.g., DOVU, PACK) are omitted from this graphic.</p><p>Active liquidity partner campaigns will continue, offering additional incentives in project tokens. Similar to V1, the focus will initially be on Hedera-native and hashport-bridged token pools, with opportunities to expand to other native projects and bridges. The total HBAR emission rate and individual LARI weights will be reassessed after Epoch 15. Assuming the incentives drive a substantial TVL increase that equilibrates at current APRs, a projected 324% TVL increase for V2 would follow.</p><p></p><h2>Network Fee Rebates</h2><p>To incentivize trading on SaucerSwap, a network fee rebate system has been introduced. For both V1 and V2 router contracts, transaction fees incurred by accounts during swap interactions are recorded. Each month, 90% of these fees are rebated to the accounts via an airdrop, boosting trading activity and not requiring any user action on claims.</p><p>Note: Rebates are in HBAR and will be sent from account 0.0.4138717.</p><h2>Faucet Initiative</h2><p>The SaucerSwap Discord server features a faucet bot dispensing small amounts of HBAR. To access this:</p><ol><li>Open Discord and navigate to the SaucerSwap server.</li><li>Follow the Wickbot prompts to verify your Discord account.</li><li>After verification, navigate to the faucet bot channel and enter !sparechange &lt;YOUR_ACCOUNT_ID&gt;, using your Hedera account ID or EVM address from MetaMask.</li><li>Your account will receive a one-time allotment of $0.275 worth of HBAR, intended to cover network fees for initial transactions.</li></ol><p>For more detailed instructions, see the <a href="https://www.youtube.com/watch?v=4ws6TZSpou4" target="_blank" rel="noopener noreferrer">Tutorial</a>.</p><h2>Other Remarks</h2><p>SaucerSwap has recently integrated <a href="https://www.moonpay.com/" target="_blank" rel="noopener noreferrer">Moonpay</a>, a leading crypto-to-fiat gateway, enabling direct crypto purchases from bank accounts. Currently, Moonpay has waived its fees, allowing users to buy HBAR and Hedera-native USDC easily and cost-effectively.</p><p><a href="https://www.staderlabs.com/hedera/stake/" target="_blank" rel="noopener noreferrer">Stader</a>, another project involved in The HBAR Foundation’s Spring Incentives Campaign, is offering 4.63% APR on HBAR liquid staking via their yield-bearing HBARX token. This is significantly higher than the native staking rate of 0.282% (as of the date of publication). HBARX can be paired with HBAR or other HTS assets and supplied in SaucerSwap to compound yield.</p><h2>Summary</h2><p>The 2024 Spring Incentives Campaign represents a significant collaboration between SaucerSwap and The HBAR Foundation, allocating 23,125,000 HBAR to various initiatives. With 21,000,000 HBAR for liquidity rewards, 1,875,000 HBAR for network fee rebates, and 250,000 HBAR for a Discord faucet initiative, the campaign aims to drive substantial growth in TVL and trading activity. Key initiatives include yield farming, the Liquidity-Aligned Reward Initiative, and a network fee rebate system, all designed to support the long-term sustainability and growth of the SaucerSwap ecosystem.</p>

SaucerSwap x The HBAR Foundation 2024 Spring Incentives Campaign

SaucerSwap x The HBAR Foundation | 2024 Spring Incentives Campaign

<p>As we bid farewell to 2023, we reflect on a remarkable year for <a href="https://www.saucerswap.finance/" target="_blank" rel="noopener noreferrer">SaucerSwap</a> and the broader <a href="https://hedera.com/use-cases/defi" target="_blank" rel="noopener noreferrer">Hedera DeFi</a> ecosystem. The year, marked by groundbreaking developments, substantial community growth, and significant technological advancements, was pivotal. Here is a retrospective of our year and a preview of what lies ahead.</p><h2><strong>Key Developments and Achievements</strong></h2><p>Defining the year was the launch of <a href="https://docs.saucerswap.finance/protocol/saucerswap-v2" target="_blank" rel="noopener noreferrer">SaucerSwap V2</a>, a unique concentrated liquidity market maker that leverages the Hedera network’s unmatched advantages. Even before the <a href="https://medium.com/@SaucerSwap/saucerswap-v2-launch-details-f6d4244e27c7" target="_blank" rel="noopener noreferrer">November launch of V2</a>, SaucerSwap achieved remarkable growth and expanded into the broader DeFi ecosystem through various integrations, partnerships, and milestones.</p><p>The year commenced with an announcement in January of a partnership with <a href="https://www.lworks.io/" target="_blank" rel="noopener noreferrer">Ledger Works</a> Sentinel DNaaS, enabling a more robust event-listening architecture for improved scalability. In February, we smoothly transitioned away from the <a href="https://www.hbarfoundation.org/blog-post/the-hbar-foundation-announces-its-support-of-saucerswap-the-decentralized-exchange-built-on-hedera" target="_blank" rel="noopener noreferrer">HBAR Foundation grant</a> by <a href="https://medium.com/@SaucerSwap/extension-of-hbar-mining-incentives-on-saucerswap-7063d118ddc5" target="_blank" rel="noopener noreferrer">extending HBAR rewards</a> to yield farmers indefinitely via a novel yield-bearing WHBAR contract that takes advantage of Hedera’s Proof-of-Stake rewards. This pivotal moment for SaucerSwap served as a harbinger of further sustainability developments later in 2023. In the following months, SaucerSwap integrated with data aggregators and accessibility platforms such as, Mises dApp browser, <a href="https://www.geckoterminal.com/hedera-hashgraph/pools" target="_blank" rel="noopener noreferrer">GeckoTerminal</a>, <a href="https://dexscreener.com/hedera/saucerswap" target="_blank" rel="noopener noreferrer">DexScreener</a>, and <a href="https://coinmarketcap.com/exchanges/saucerswap-v1/" target="_blank" rel="noopener noreferrer">CoinMarketCap</a>. Our presence expanded further by attending the <a href="https://blockworks.co/event/permissionless-2023" target="_blank" rel="noopener noreferrer">Permissionless II web3 conference</a> in Austin, TX alongside Hedera.</p><p>Throughout 2023, SaucerSwap more than doubled its Total Value Locked (TVL) to $60 million, ascended from #45 to #29 in <a href="https://defillama.com/protocols/Dexes" target="_blank" rel="noopener noreferrer">Top DEX rank on DeFiLlama</a>, and increased its daily average volume by over 300% to $3 million. With the integration of MetaMask and enhanced capital efficiency through SaucerSwap V2, we observed an increase in website traffic exceeding 250%. Additionally, with the publication of extensive <a href="https://docs.saucerswap.finance/developer/developer-resources" target="_blank" rel="noopener noreferrer">developer documentation</a>, we anticipate more dApps will be developed on SaucerSwap V1 &amp; V2 in the near future, as evidenced by the heightened activity in our developer forums.</p><p>As we approach 2 million total trades, SaucerSwap has facilitated interaction for users of all types with Hedera DeFi in a permissionless and non-custodial environment. With an average transaction speed of 5 seconds and a cost of less than $0.10 (<a href="https://hedera.com/fees" target="_blank" rel="noopener noreferrer">fixed in USD, regardless of network traffic</a>), SaucerSwap has realized its vision of decentralized access to a fair, accessible, and efficient trading protocol on Hedera, the most performant network in web3.</p><p>In 2023, SaucerSwap’s social network presence saw significant growth, evidenced by a <a href="https://twitter.com/SaucerSwapLabs" target="_blank" rel="noopener noreferrer">500% increase in Twitter followers</a> and a 250% rise in impressions. Furthermore, the SaucerSwap Labs team conducted 16 AMAs throughout the year, maintaining an active dialogue with the community.</p><p>Most importantly, SaucerSwap attained a crucial 2023 goal: reducing reliance on token emissions and transitioning to real-yield incentives. Following the successful implementation of <a href="https://medium.com/@SaucerSwap/saucerswap-v2-tokenomics-proposal-b355182545a6" target="_blank" rel="noopener noreferrer">SaucerSwap Tokenomics V2</a>, SAUCE token emissions were reduced by 60%, along with an 80% reduction in V1 yield farms. Despite this substantial reduction in the inflation rate of newly-minted SAUCE, APRs remain competitive, driven by increased trading volume and consequently higher fees for liquidity providers, as well as the development of the <a href="https://docs.saucerswap.finance/protocol/saucerswap-v2#liquidity-aligned-reward-initiative-lari" target="_blank" rel="noopener noreferrer">Liquidity-Aligned Reward Initiative (LARI)</a>. This shift towards a more sustainable model marks a remarkable achievement for SaucerSwap and a significant victory for Hedera DeFi.</p><p>Presented below is a detailed list of key events, milestones, and developments for SaucerSwap in 2023:</p><ul><li>January 4: Announced partnership with Ledger Works Sentinel DNaaS for scalability.</li><li>January 12: Achieved 500,000 all-time trades.</li><li>January 14: Held SaucerSwap AMA; released Discord price bots for default listed tokens.</li><li><strong>January 17: Reached $25M in Total Value Locked (TVL).</strong></li><li>January 20: TVL reached $30M.</li><li>January 28: SaucerSwap AMA.</li><li>January 29: Published Japanese documentation.</li><li>February 3: Published Turkish documentation.</li><li>February 4: Achieved $100M in total trade volume.</li><li><strong>February 11: SaucerSwap AMA; announced post-grant extension of HBAR mining incentives via staking in WHBAR contract.</strong></li><li>February 26: Integrated into Mises dApp browser.</li><li>March 1: Open-sourced LP token timelock smart contracts.</li><li><strong>March 7: Released an overhauled web-app.</strong></li><li>March 11: SaucerSwap AMA.</li><li>March 13: Upgraded HTS charts for price, liquidity, and volume in terms of HBAR.</li><li>March 25: SaucerSwap x Citadel Wallet AMA.</li><li>March 26: Announced partnership with Citadel Wallet.</li><li>March 30: Launched SAUCE buyback Discord price bot.</li><li>April 9: Achieved $150M in total trade volume.</li><li>April 22: SaucerSwap AMA.</li><li><strong>April 28: Achieved 1M all-time trades; integrated as an exchange on CoinMarketCap.</strong></li><li>May 6: SaucerSwap AMA.</li><li>May 11: Updated SaucerSwap Token Listings methodology and documentation.</li><li><strong>May 17: Announced upcoming SAUCE Pro feature.</strong></li><li>May 20: SaucerSwap AMA.</li><li>June 3: SaucerSwap AMA; collaborated with CoinMarketCap to create a ‘Hedera ecosystem’ category.</li><li>July 1: Announced plans to navigate HSCS security update via token allowances.</li><li>July 10: Published tutorial video for navigating HSCS security update.</li><li>July 12: SaucerSwap V2 passed all unit tests.</li><li><strong>July 15: SaucerSwap AMA; published ‘SaucerSwap Tokenomics Model V2’ proposal.</strong></li><li>July 29: SaucerSwap AMA.</li><li>August 5: Celebrated SaucerSwap’s one-year anniversary.</li><li><strong>August 9: ‘SaucerSwap Tokenomics Model V2’ officially confirmed by SaucerSwap DAO.</strong></li><li>August 12: SaucerSwap AMA.</li><li>August 16: Published job opening for front-end software engineer.</li><li>August 18: Achieved $200M in total trade volume.</li><li>August 26: SaucerSwap AMA.</li><li>September 9: SaucerSwap AMA.</li><li><strong>September 11: Attended Permissionless II with Hedera.</strong></li><li>September 17: Featured on the main stage at Karate Combat KC41.</li><li>September 26: Announced LARI (Liquidity-Aligned Reward Initiative).</li><li>September 28: Achieved 200M HBAR balance in WHBAR contract.</li><li>September 29: Published SaucerSwap V2 audit results.</li><li><strong>October 1: Integrated into GeckoTerminal.</strong></li><li>October 2: Achieved 500 unique liquidity pools.</li><li>October 4: Unveiled SaucerSwap V2 UI.</li><li>October 13: Announced SaucerSwap V2 volatility strategies.</li><li>October 14: SaucerSwap AMA; announced SaucerSwap V2 testnet public beta and bug bounty.</li><li><strong>October 19: Published overhauled ‘<a href="https://docs.saucerswap.finance/" target="_blank" rel="noopener noreferrer">SaucerSwap Docs V2.0’.</a></strong></li><li>October 25: Published “SaucerSwap V2: Create Position” and “SaucerSwap V2: Manage Position” video tutorials; released SaucerSwap V2 Core Whitepaper.</li><li>October 28: Launched SaucerSwap V2 Testnet Beta.</li><li>October 30: Published written tutorials for SaucerSwap V1 &amp; V2 in official documentation.</li><li>November 1: Announced SaucerSwap DAO legal wrapper established in the state of Florida.</li><li>November 4: Concluded SaucerSwap V2 Testnet Beta.</li><li>November 6: Published “SaucerSwap V2: Depth Chart” video tutorial; distributed rewards for SaucerSwap V2 Testnet Bug Bounty program.</li><li>November 8: Secured #35 Top DEX spot on DeFiLlama.</li><li>November 11: SaucerSwap AMA; announced SaucerSwap V2 launch date.</li><li>November 15: Announced MetaMask integration into SaucerSwap web-app.</li><li>November 16: Published “SaucerSwap V2: MetaMask” video tutorial.</li><li><strong>November 17: Published “SaucerSwap V2: Migrate Liquidity” video tutorial; published “SaucerSwap V2 Launch: What to Expect” article; launched SaucerSwap V2; commenced LARI Epoch 1; initiated Phase I of SaucerSwap Tokenomics V2.</strong></li><li>November 18: Achieved $5M TVL in SaucerSwap V2.</li><li>November 19: Achieved $10M TVL in SaucerSwap V2.</li><li>November 20: Published extensive Developer Documentation for V1 &amp; V2.</li><li>November 29: Integrated into DexScreener and KarateCombat iOS &amp; Android apps.</li><li>December 1: Commenced LARI Epoch 2.</li><li>December 3: Created CLXY-HBAR V2 pool.</li><li>December 5: Achieved $40M TVL.</li><li><strong>December 8: SaucerSwap V2 integrated into CoinGecko and GeckoTerminal; initiated Phase II of SaucerSwap Tokenomics V2.</strong></li><li>December 15: Commenced LARI Epoch 3; announced partnership with The Creator’s Galaxy for LARI rewards in CLXY token.</li><li>December 16: Announced weekly trading volume all-time high.</li><li><strong>December 21: Achieved $50M TVL.</strong></li><li>December 23: Created SaucerSwapEs X account for Spanish users.</li><li><strong>December 24: Secured #29 Top DEX spot on DeFiLlama.</strong></li><li>December 27: Announced SAUCE buyback record.</li><li>December 29: Initiated LARI Epoch 4; announced expansion of CLXY rewards to multiple pools; commenced Phase III (final) of SaucerSwap Tokenomics V2.</li><li><strong>December 30: Achieved all-time high in weekly trade volume.</strong></li></ul><h2><strong>2024 Prospective</strong></h2><p>Looking forward to 2024, SaucerSwap Labs is thrilled to continue developing the SaucerSwap protocol. Although not comprehensive, here are some select highlights from our 2024 roadmap:</p><p><strong>In Development (</strong>projects actively being developed):</p><ul><li><a href="https://medium.com/@SaucerSwap/introduction-to-sauce-pro-enhancing-the-saucerswap-experience-96a4fbb68650" target="_blank" rel="noopener noreferrer">SAUCE Pro</a></li><li>Active Liquidity Management Protocol Integration</li><li>Upgraded Buyback Program</li><li>Initiate more Custom-Tailored LARI Campaigns</li><li>Improved LARI Analytics</li><li>Ongoing Web-App Optimizations</li></ul><p><strong>Planned for Development</strong> (projects that are on the near-term roadmap):</p><ul><li>Token-Weighted Voting System</li><li>Auto Router</li></ul><p><strong>Prioritized for Development</strong> (projects that are prioritized but not yet planned for development):</p><ul><li><a href="https://docs.saucerswap.finance/protocol/community-pools" target="_blank" rel="noopener noreferrer">Community Pools</a></li><li>On-Chain Limit Orders</li><li>Front-End Bridge Integration</li><li>Fiat Onramp Integration</li><li><a href="https://hips.hedera.com/hip/hip-551" target="_blank" rel="noopener noreferrer">Batch Transactions (HIP-551)</a></li><li>Hedera <a href="https://walletconnect.com/" target="_blank" rel="noopener noreferrer">WalletConnect</a> Integration</li></ul><p>Generally speaking, our overarching goals for 2024 are to expand and improve accessibility, increase reach and presence within the larger web3 ecosystem, and leverage the unique benefits of the Hedera network to develop technologically superior and user-friendly solutions to push forward the realm of decentralized finance.</p><h2><strong>Conclusion</strong></h2><p>The extraordinary growth in 2023 has set a new benchmark for SaucerSwap’s potential. We extend our profound gratitude to our community, partners, and team members, whose contributions have been pivotal in this success. As we enter 2024, we are enthusiastic about further innovating and expanding Hedera DeFi together.</p><p>Wishing a Happy New Year and a fruitful 2024!</p>

As we bid farewell to 2023, we reflect on a remarkable year for SaucerSwap and the broader Hedera DeFi ecosystem.

A year-in-review summary highlighting SaucerSwap’s 2023 growth, protocol innovation, ecosystem expansion, and key performance milestones.

SaucerSwap 2023: A Year of Unprecedented

<h2>Introduction</h2><p>As we enter 2025, the decentralized finance (DeFi) landscape continues to evolve at a rapid pace. <a href="https://www.saucerswap.finance/" target="_blank" rel="noopener noreferrer">SaucerSwap</a>, <a href="https://hedera.com/" target="_blank" rel="noopener noreferrer">Hedera’s</a> leading decentralized exchange, has shaped the network’s DeFi ecosystem from the start. Today, we’re thrilled to share our roadmap — one that builds on our proven foundations while charting an ambitious course for the future.</p><h2>Where We Stand</h2><p>Since launching in 2022, SaucerSwap has evolved from a nascent AMM into a cornerstone of Hedera’s DeFi infrastructure. We now command the majority market share among <a href="https://defillama.com/chain/Hedera" target="_blank" rel="noopener noreferrer">Hedera DeFi protocols</a>, boasting approximately $130 million in Total Value Locked (TVL), over 165 million <a href="https://coinmarketcap.com/currencies/hedera/" target="_blank" rel="noopener noreferrer">HBAR</a> secured in our <a href="https://hashscan.io/mainnet/contract/0.0.1456985" target="_blank" rel="noopener noreferrer">wrapped HBAR contract</a>, and more than $2.4 billion in cumulative trading volume across seven million swap events.</p><p>Our late-2023 launch of SaucerSwap V2 introduced concentrated liquidity, setting new standards for capital efficiency on Hedera. Meanwhile, the Liquidity-Aligned Reward Initiative (LARI) has optimized incentive structures for liquidity providers, building a more sustainable and efficient model for market-protocol alignment.</p><h2>Vision &amp; Strategic Direction</h2><p>Our mission is simple: build the most efficient, accessible, and secure decentralized exchange — on Hedera and beyond. As we look to 2025 and beyond, our roadmap centers on four core pillars:</p><h3>1. Protocol Improvement &amp; Innovation</h3><p>We remain committed to expanding DeFi’s possibilities. Our immediate priority is optimizing existing systems to ensure fair rewards, robust core functionality, and a seamless user experience. We will also explore transformative features such as permissionless V2 pool creation, on-chain limit orders, and, eventually, perpetual futures trading.</p><h3>2. User Experience &amp; Accessibility</h3><p>DeFi’s future relies on making complex tools universally accessible. Our roadmap emphasizes near-term improvements — faster charting, enhanced mobile responsiveness, and more intuitive transaction flows. We are also building comprehensive solutions like a dedicated mobile app and multi-currency support to serve our expanding global community.</p><h3>3. Infrastructure &amp; Security</h3><p>As our protocol scales, our commitment to robust infrastructure deepens. We are improving app performance via global backup locations (Multi-AZ), expanding our data analytics capabilities (via a subgraph), and fortifying our security framework through integrations with leading providers like <a href="https://www.chainalysis.com/" target="_blank" rel="noopener noreferrer">Chainalysis</a>.</p><h3>4. Ecosystem Growth</h3><p>We aim to support the ecosystem in every possible way. By integrating bridge protocols like <a href="https://www.axelar.network/" target="_blank" rel="noopener noreferrer">Axelar</a> and <a href="https://layerzero.network/" target="_blank" rel="noopener noreferrer">LayerZero</a>, we will attract more cross-chain liquidity and a broader user base. Enhanced token classification systems and a frictionless listing process will further empower token creators seeking to leverage SaucerSwap. Our goal is a more interconnected, efficient, and accessible DeFi ecosystem on Hedera.</p><h2>Our Roadmap</h2><p>Informed by these four key pillars, we have put together a roadmap that incorporates new ideas and highly-requested items from the community.</p><p>This roadmap outlines our development priorities across three timeframes:</p><h2><strong>Immediate Term</strong></h2><ul><li><a href="https://docs.saucerswap.finance/protocol/saucerswap-v2#liquidity-aligned-reward-initiative-lari" target="_blank" rel="noopener noreferrer">LARI</a> system refinement and automation</li><li><em>— Streamlined campaign initiation and reward distribution</em></li><li><em>— Data-driven reward weight optimization</em></li><li><em>— Improved epoch analytics for liquidity providers</em></li></ul><h3><strong>User Interface &amp; Experience</strong></h3><ul><li>Global search functionality</li><li>Comprehensive website redesign</li><li>Swap widget implementation</li><li>Transaction flow optimization</li><li>Enhanced token menu with balance sorting</li><li>Advanced charting integration</li><li><em>— Higher-fidelity data for top-traded pairs</em></li><li><em>— Technical indicators</em></li><li><em>— Improved price feeds</em></li><li>Mobile responsiveness improvements</li><li>Expanded token information on swap pages</li><li><em>— Market data integration</em></li><li><em>— Analytics overlays</em></li><li><em>— Key performance metrics</em></li></ul><h3><strong>Infrastructure &amp; Security</strong></h3><ul><li>Resilient, faster app performance via global backup locations (Multi-AZ)</li><li>Launch of SaucerSwap subgraph, <em>integrating with <a href="https://dune.com/discover/content/trending" target="_blank" rel="noopener noreferrer">Dune Analytics</a> and other key protocols</em></li><li>SAUCE 300 implementation</li><li><em>— Pool ranking system</em></li><li><em>— Improved token classification system</em></li><li>Basic user support system automation</li><li>Transaction reliability improvements</li></ul><h3><strong>Ecosystem Development</strong></h3><ul><li><a href="https://www.squidrouter.com/" target="_blank" rel="noopener noreferrer">Axelar bridge</a> integration <em>to enable cross-chain liquidity</em></li><li>Strategic protocol partnerships</li><li>Token classification system enhancements</li></ul><h2><strong>Near Term</strong></h2><h3><strong>Protocol Features</strong></h3><ul><li>Auto-slippage implementation</li><li>Permissionless V2 pool creation</li><li>On-chain limit orders</li><li>Automated Dollar-Cost Averaging (DCA) functionality</li><li>Community Pools</li><li>V2 compound and rebalance features</li><li>Comprehensive pool performance dashboard</li><li><em>— Position analytics</em></li><li><em>— Earnings tracking</em></li><li><em>— Historical performance metrics</em></li></ul><h3><strong>User Experience</strong></h3><ul><li>Local timezone integration</li><li>Push notification system</li><li>Dedicated faucet interface</li><li>iOS and Android mobile applications</li><li>Pool performance analytics dashboard</li></ul><h3><strong>Infrastructure</strong></h3><ul><li>Chainalysis and <a href="https://www.chainabuse.com/" target="_blank" rel="noopener noreferrer">Chainabuse</a> integration</li><li>Developer documentation overhaul</li><li>LLM-powered semantic search</li><li>LayerZero integration</li></ul><h3><strong>Market Expansion</strong></h3><ul><li>Community Pools launch</li><li>SAUCELING NFT launch</li><li>Localization for key markets</li><li><em>— Spanish-speaking regions</em></li><li><em>— Southeast Asia</em></li><li><em>— Other high-growth areas</em></li></ul><h2><strong>Future Development</strong></h2><h3><strong>Protocol Innovation</strong></h3><ul><li>SaucerSwap V3 development</li><li>Perpetual futures platform</li><li>HTS ↔ ERC-20 compatibility layer</li><li>Hedera “ETF” contracts</li></ul><h3><strong>Infrastructure</strong></h3><ul><li>Decentralized website mirrors</li><li>Universal analytics dashboard</li><li>Advanced trading tools</li><li>Cross-chain security framework</li></ul><h3><strong>Ecosystem Growth</strong></h3><ul><li>DAO-as-a-service infrastructure</li><li>Sub-DAO framework</li><li>Institutional partnerships program</li><li>Cross-chain liquidity networks</li></ul><h2><strong>Technical Implementation Notes</strong></h2><p>This roadmap’s execution considers several key technical factors:</p><h3><strong>Smart Contract Development</strong></h3><p>Near-term protocol features requiring contract development (auto-router, community pools, and limit orders) are sequenced to ensure thorough testing and auditing.</p><h3><strong>Infrastructure Scaling</strong></h3><p>Multi-AZ deployment and enhanced monitoring systems remain top priorities to support rising transaction volume and global user adoption.</p><h3><strong>Data Architecture</strong></h3><p>Subgraph implementation will improve analytics, data retrieval, and third-party integrations.</p><h3><strong>Security Considerations</strong></h3><p>Each phase includes matching security upgrades — from standard transaction monitoring to advanced cross-chain security frameworks.</p><h2><strong>New Vision for Community Pools</strong></h2><h3><strong>Background</strong></h3><p>Since our initial protocol launch in 2022, community pools have been a highly anticipated feature among SaucerSwap users. In Phase 1, we introduced SAUCE staking (to mint xSAUCE), enabling participants to earn passive APR on their SAUCE tokens.</p><p>However, Phase 2 — staking xSAUCE to earn external project tokens — was delayed as our attention turned to foundational improvements like SaucerSwap V2. Additionally, the slow pace of new token projects launching on Hedera in 2023 and early 2024 meant fewer opportunities to partner on meaningful community pool campaigns.</p><h3><strong>The Turning Point</strong></h3><p>Recently, we’ve witnessed a surge of new projects on Hedera. HeadStarter has been steadily onboarding promising ventures, and <a href="https://memejob.fun/" target="_blank" rel="noopener noreferrer"><strong>memejob.fun</strong></a> (analogous to pump.fun) has shown creativity in incubating community-driven tokens. With more projects seeking fast and efficient token distribution, the time is right for community pools to thrive.</p><h3><strong>Embracing Decentralization</strong></h3><p>Our new vision for community pools puts decentralization at the core. Rather than limiting these pools to a single launchpad or specific partnership model, we will enable multiple pathways for projects to create their own pools on SaucerSwap. Whether a token graduates from <a href="https://memejob.fun/" target="_blank" rel="noopener noreferrer"><strong>memejob.fun</strong></a>, is incubated by <a href="https://headstarter.org/" target="_blank" rel="noopener noreferrer"><strong>HeadStarter</strong></a>, or emerges from another community launchpad, the process should be accessible, fair, and transparent. This approach empowers teams of all sizes — from indie devs to larger DAOs — to leverage SaucerSwap for token distribution and liquidity growth.</p><h3><strong>How It Works</strong></h3><p><strong>1 . Stake xSAUCE</strong> in community pools to earn new project tokens.</p><ul><li>Projects looking to distribute tokens can use this mechanism to engage xSAUCE holders directly.</li></ul><p><strong>2 . Boosted Rewards with SAUCELING NFTs</strong> (Phase 3).</p><ul><li>Future community pools will offer reward multipliers for those who hold and stake <strong>SAUCELING NFTs</strong>.</li><li>SAUCELING NFTs themselves will be obtainable by exchanging legacy <strong>Planck Epoch NFTs</strong>, bridging our earliest supporters into this new rewards ecosystem.</li></ul><h3><strong>Why Community Pools Matter</strong></h3><ul><li><strong>Faster, More Efficient Token Distribution</strong>: Projects can tap into an established user base by incentivizing xSAUCE stakers with their tokens.</li><li><strong>Community-Driven Liquidity Growth</strong>: By distributing tokens directly to engaged users, new projects can bootstrap liquidity more effectively on SaucerSwap.</li><li><strong>Inclusivity and Innovation</strong>: Any project, regardless of its origin or size, can build community pools. This opens the door to a richer, more diverse Hedera ecosystem.</li></ul><h3><strong>Next Steps</strong></h3><p>We recognize the community’s enthusiasm for this feature and regret the delays. SaucerSwap V2 needed our full attention to bring concentrated liquidity and improved capital efficiency to the ecosystem. But now that the DeFi landscape on Hedera is rapidly expanding, community pools are back in focus. We’re working on a decentralized framework to ensure minimal friction for projects that want to launch pools and maximum choice for xSAUCE stakers looking to diversify their rewards.</p><p>Stay tuned for further updates on Phase 2, where xSAUCE holders will be able to stake in community pools for project tokens — and Phase 3, where staking SAUCELING NFTs for boosted rewards will bring additional depth and opportunity to our rewards ecosystem.</p><p>Together, we’ll usher in a new era of community-driven DeFi on Hedera, where projects of all shapes and sizes can thrive on SaucerSwap.</p><h2><strong>Conclusion</strong></h2><p>This roadmap represents a technically grounded strategy for scaling SaucerSwap’s infrastructure, improving capital efficiency, and expanding cross-chain functionality. As the DeFi market evolves, we will refine timelines and specifics based on technological breakthroughs, market conditions, and community feedback.</p><p>We remain steadfast in our commitment to delivering an accessible, secure, and innovative DeFi experience — pioneering the next chapter of decentralized finance on Hedera and beyond.</p><p><em>For discussion, join us on:</em></p><ul><li><strong>Discord</strong>: <a href="https://discord.gg/saucerswap" target="_blank" rel="noopener noreferrer">https://discord.gg/saucerswap</a></li><li><strong>Twitter</strong>: <a href="https://twitter.com/SaucerSwapLabs" target="_blank" rel="noopener noreferrer">https://twitter.com/SaucerSwapLabs</a></li><li><strong>Governance Forum</strong>: <a href="https://gov.saucerswap.finance/" target="_blank" rel="noopener noreferrer">https://gov.saucerswap.finance/</a></li></ul>

As we enter 2025, the decentralized finance (DeFi) landscape continues to evolve at a rapid pace. 

A forward-looking view of SaucerSwap’s long-term vision, covering product direction, protocol strategy, and priorities beyond 2025.

SaucerSwap | 2025 & Beyond

Insights, updates, and how-tos covering product, protocol, ecosystem, and research from Hedera’s #1 DEX.

Welcome

to the

SaucerSwap Blog

Featured

Introducing SaucerSwap V3

LayerZero on SaucerSwap: Bringing Cross-Chain Capital to Hedera

SaucerSwap Labs Launches a Dedicated Bridge, Powered by Squid and Axelar

SaucerSwap V2 Launch Details

SaucerSwap Amended Token Listing and Classification

SaucerSwap x The HBAR Foundation | 2024 Spring Incentives Campaign

Our Topics:

Introducing the Hashgraph DeFi Alliance

LayerZero on SaucerSwap: Bringing Cross-Chain Capital to Hedera

Extension of HBAR Mining Incentives on SaucerSwap

Welcome to the SaucerSwap Blog

Featured

Introducing SaucerSwap V3

LayerZero on SaucerSwap: Bringing Cross-Chain Capital to Hedera

SaucerSwap Labs Launches a Dedicated Bridge, Powered by Squid and Axelar

SaucerSwap V2 Launch Details

SaucerSwap Amended Token Listing and Classification

SaucerSwap x The HBAR Foundation | 2024 Spring Incentives Campaign

Our Topics:

Introducing the Hashgraph DeFi Alliance

LayerZero on SaucerSwap: Bringing Cross-Chain Capital to Hedera

Extension of HBAR Mining Incentives on SaucerSwap

Welcome

to the

SaucerSwap Blog