The USD Swaps system brings wrapped USD stable tokens to the Telos Blockchain. It also a new USD stable token and a liquidity token. This article explains the purpose of these new tokens.
Telos Swaps offers token swaps similar to Bancor or Uniswaps. This approach works well when token values are expected to be independent. It, however, does not work well when the assets in the swap pool are expected to be of similar value (as in the case with USD stable coins). This problem is solved using low price slippage converters such as those found in Curve.fi. The USD Swaps pool on TSwaps.com makes use of a low slippage converter to support USD token swaps.
Tokens supported by USD Swaps
Currently the USD Swaps system supports the following wrapped tokens from the EOS blockchain.
- USDT (token contract “tethertether” on EOS)
- EOSDT (token contract “eosdtsttoken” on EOS)
Both tokens are wrapped by the Telosd cross chain bridge (Telos contract “telosd.io”, EOS contract “telosd.io”). The bridge is decentralised, using five reporters to witness transfers on one chain and communicate to the other. It requires 3/5 consensus to complete cross chain transfers.
New tokens introduced by USD Swaps
Most users will be familiar with USDT and EOSDT tokens found in the USD Swaps pool. The pool also introduces two new tokens, TLOSD and TLOSM.
TLOSD (Telos Dollar)
The TLOSD token is a USD stable token collateralized by the USDT and EOSDT reserves on the USD Swaps contract. The TLOSD price is set as the average price of the tokens in the USDT, EOSDT pool. The TLOSD token is the network token used to join the USD Swaps pool to the Telos Swaps network in a manner which concentrates the USD liquidity in a single converter. This gives better price stability across all USD tokens on Telos Swaps.
TLOSM (USD Swaps liquidity token)
The USD Swaps pool charges a 0.2% fee on all token conversions performed. The TLOSM liquidity token was added to the USD Swaps system to allow these fees to be distributed to liquidity providers. TLOSM holders get the benefit of fees charged on all USD swaps on the system. Because TLOSD is used as the connector between the USD Swaps system and the Telos Swaps system all swaps on Telos Swaps involving USD tokens result in fees being collected for the benefit of TLOSM token holders.
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