BasicSwap is a groundbreaking DEX that lets you swap one cryptocurrency for another in full privacy and without any counterparty risk at all. And to top it all, it's completely free to use.
The platform's unique benefits sure are drawing attention, but as it's still in the early stages of development, some users find its quirks a bit challenging to work with. This has unfortunately affected the liquidity available on the DEX's order book.
To help overcome these challenges and improve liquidity, we present you today two video tutorials that will show you how to smoothly run BasicSwap on a cloud server and automate the process of providing liquidity on the DEX using BasicSwap's automated market making script. When combined together, this will let you set your desired spread based on current market prices and potentially earn you arbitrage profits whenever other traders pick up your offers.
If you want to jump straight to the video tutorials, click here.
Addressing Some of BasicSwap's Main Challenges
As BasicSwap is currently in its beta phase, it's natural and expected that users might need to put in extra effort to get it up and running. Fixing these obstacles is all a part of our development roadmap, and we're actively working to address them through ongoing updates; our goal being to evolve BasicSwap into a highly user-friendly and intuitive trading platform.
However, for those eager to leverage the benefits of BasicSwap today, there are a few challenges to navigate in the meantime.
The Need to Run and Store BasicSwap Nodes Locally
One of the current challenges with BasicSwap is the necessity to run the DEX locally. This can be resource-intensive, both in terms of CPU usage and storage space as it requires running full nodes — and storing blockchains — for each cryptocurrency you wish to enable and swap.
While BasicSwap works with pruned blockchains, which considerably reduce the storage footprint, the DEX still demands several gigabytes of space. And while this approach offers the highest level of security and privacy, it comes with significant resource requirements that may not be feasible for everyone.
Another consideration when running a full node is the need to keep your computer running continuously if you want your offers to remain visible on the order book and to execute swaps. This can be inconvenient for those who aim to provide liquidity reliably and continuously, and makes your setup vulnerable to power cuts and internet downtimes.
The Need to Manually Update and Republish Offers
With BasicSwap's current version, offers listed on the order book are time-sensitive, expiring after a maximum of 48 hours. Once an offer expires, it requires you to manually republish it so that it reappears on the order book. This process sure can be cumbersome, especially for those looking to passively provide liquidity and with hopes of earning profits from it.
Additionally, BasicSwap does not currently have a built-in feature for automatically calculating current market rates for the trading pairs you offer. This means each time you refresh your offers, you need to manually determine the market rates, another potentially time-consuming task especially when working with multiple pairs.
Automated Market Making on a 24/7 BasicSwap Cloud Instance
As we progress in our development roadmap, addressing these challenges and improving the user experience to make the DEX more intuitive is a top priority.
Indeed, our roadmap includes plans to enable light nodes, remote services, web gateways, and the integration of advanced market making strategies directly into the DEX, among other items.
But in the meantime, we understand the importance of providing immediate solutions to these issues. To that end, we have prepared two specific video tutorials that are designed to help you navigate through the aformentioned challenges effectively, offering practical solutions that you can implement right away.
Setup BasicSwap on a VPS
The first step is to get a reliable 24/7 BasicSwap instance that requires no manual input from you once setup.
You can easily do this by installing the DEX on a cloud/VPS server. This is extremely useful because, once deployed, it won't require you to keep your computer on at all time and won't cost you storage space or CPU power on your personal computer.
While there is a cost associated with hosting a VPS, our second video, which shows how to run automated market making on BasicSwap, may help in offsetting the costs via any potential trading profits.
Automated Market Making Script
The second video tutorial shows you how to deploy BasicSwap's companion automated market making script on the cloud instance we've just set up. This allows you to provide liquidity on the order book in a completely automated manner, ensuring that your offers are republished when they expire.
What's more, it also allows you to peg your rates to the current market prices and add a markup on top of that market rate, netting you potential profits whenever people pick up your offers.
Combined with your cloud instance of BasicSwap, this makes running an automated BasicSwap node and providing liquidity to the DEX entirely effortless once the initial setup is complete. Simply ensure your server is online, deploy the market making script, and earn arbitrage profits as people trade using your liquidity.
Why Providing Liquidity is Important
BasicSwap, as an order book-based DEX, significantly differs from Automated Market Maker (AMM) style exchanges. While AMM DEXs can achieve deeper liquidity through algorithmic aggregation of all provided liquidity, they face several critical issues that BasicSwap effectively addresses. These include susceptibility to front-running, the prevalence of rug pulls, lack of financial privacy, potential slippage on large trades, and other related challenges.
However, order book-based platforms like BasicSwap require more liquidity to fill various price ranges for each pair, as this liquidity isn't being algorithmically driven towards a calculated market price. A lack of sufficient liquidity can make the exchange less appealing, leading to larger spreads and fewer trading opportunities. Conversely, when there's an abundance of liquidity, order book-based DEXs can outperform AMM platforms by offering traders more control over the prices at which they wish to trade.
In essence, for BasicSwap and other order book-based exchanges (including most centralized exchanges), liquidity is the name of the game. It's the key factor that determines the platform's effectiveness and appeal. As such, we are calling on you to contribute to BasicSwap's growth by helping to increase its liquidity.
Ushering a Better World for Crypto Trading
As liquidity on BasicSwap increases, it will improve the appeal of each trading pair, offering traders what they need to permanently move away from centralized exchanges; a shift that is essential for taking back control over their own coins and financial privacy.
Centralized exchanges have long maintained a firm grip over the cryptocurrency market, acting as gatekeepers and creating central points of failure. This is in direct contradiction to the foundational ethos of cryptocurrencies. After all, recent events have clearly demonstrated the severe repercussions of over-reliance on such centralized systems.
Incidentally, this is precisely the reason behind the creation of BasicSwap DEX. Its non-custodial nature, commission-free model, and privacy-first approach represent the comprehensive solution needed for the crypto ecosystem to progress and withstand the upcoming regulatory attack against it.
By contributing liquidity to BasicSwap, you're not just participating in the platform's growth; you're becoming a part of the historical movement fighting for our digital sovereignty. Your involvement plays a crucial role in shaping a more secure and decentralized future for cryptocurrency trading.
For this reason, we invite you to join us in this initiative today. Together, we can make a significant impact, and we thank you for standing alongside with us in this important life mission.
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