Blog

Introducing Pegasys

And so it begins…

Pegasys is a permissionless decentralized exchange (DEX) running on Syscoin NEVM, Syscoin’s EVM-compatible protocol extension, that aims to bring something fresh and impactful to the DeFi space. It uses the same automated market-making (AMM) model as Uniswap, features a native governance token called PSYS that is community distributed and is capable of trading all tokens issued on Syscoin. In a crowded marketplace with multiple contenders, Pegasys offers three critically important benefits: fast and cheap trades, high-quality development, and a realistic, fair, and market-compatible token distribution.

Since Pegasys is built on Syscoin, it enables users to swap assets at scale, with bitcoin-merge-mined security, processing power, and transaction fees as low as a few cents. Our DEX also leverages the best of both worlds: community governance and battle-hardened software expertise from Pollum. The native governance token, PSYS, enables the community to drive the development of the product in full by taking part in the various liquidity mining programs available, as well as special events and partnerships we have planned down the line.

Scalability + BTC security
Scalability + BTC security

Users of existing AMMs, such as Uniswap, Sushiswap, Pangolin, and Quickswap are already familiar with their mechanism of action. Therefore, the rest of this post does not discuss how Pegasys achieves its trading capabilities. Instead, we discuss the mentality behind the project, with further technical optimizations, tokenomics, and overall peculiarities being discussed in future blog posts.

Thanks to the power of open-source software, we’re very much taking other protocols’ failures and successes into consideration when building our own AMM. Above all, Uniswap and Pangolin are the most pivotal pieces of codebase we based Pegasys off of, so UNI & PGN token holders can expect PSYS airdrops in the near future when bridging liquidity over to Pegasys.

On the other hand, we don’t plan on taking a “basic-Uniswap-fork” approach with Pegasys like Quickswap or Pangolin did. Our vision for the protocol is much more similar to what Sushi did with the AMM model by putting our own twist on top of Uniswap’s solid algorithms in order to to make it optimal for Syscoin and for our own community. From the get-go, we have Syscoin-specific features as well as Layer 2 and further scalability-focused features planned for the near future.

An AMM truly built for Syscoin, by the community for the community
An AMM truly built for Syscoin, by the community for the community

Just like current leading DEXs, such as Uniswap, anyone can trade any ERC20 token on Pegasys. If an asset isn’t currently supported on the platform, users can list any ERC20 token on Pegasys by providing liquidity to enable instant asset swaps. They will then earn fees every time other users trade via that trading pair.

Liquidity providers will be incentivized by both yield farming and liquidity mining opportunities. Users who provide liquidity for incentivized trading pairs on Pegasys will not only be entitled to a percentage of the platform’s 0.3% trading fees, but will also earn Pegasys’ native PSYS governance token for their participation.

The protocol will be governed by PSYS token holders, who will be able to create proposals for and vote on various factors relating to the running of the protocol. Pegasys is being built for the community, to be run (eventually) entirely by the community.

Spoiler alert

One central optimization Pegasys is doing to the protocol is using more modern ERC-20 extensions that will allow our users to cut steps on token allowance and leverage a better UX for trading. Syscoin is also really bullish on bringing Layer 2 technologies to the network, so the Pegasys team is already DD’ed and experimenting with implementations to provide the community with the best DEX experience around.

We believe the Syscoin community is one of the most constructive and tech-oriented around so it’s more than fair to step up the AMM game for the incoming DeFi Renaissance in the network. Not only that, Pegasys can be a gateway from other EVMs to Syscoin NEVM so it’s really important for us to be competitive outside Syscoin as well.

Finally, PSYS will have very unique and realistic tokenomics. We appreciate the optimism involved in PGNs 28-year distribution plan and the aggressive 4-year liquidity mining Quickswap brought forward but we definitely think a successful yield farming strategy needs more room to grow and multiple community-driven, as well as data-driven, decisions along the way to provide a realistically fair token distribution for a protocol that is built to last. And most of all: to evolve.

An army of amorphous & fluid Pegasi is coming, make sure to grab your seat...
An army of amorphous & fluid Pegasi is coming, make sure to grab your seat...

Future blog posts will get into more detail into our vision of each one of those topics. From day one, we’re completely open to your take on what should and shouldn’t be done, so feel free to join our Discord and voice your opinions on what we’re building!

Conclusion: A Public Good for Syscoin and EVMs

Syscoin has been at the forefront of modernizing Bitcoin-based blockchain applications and the release of NEVM only brings that to the next level. We can expect an extensive and vibrant ecosystem to develop, especially with future L2 plans and Syscoin Foundation’s known tech-focused vision. An effective, dynamic, and evolving AMM is definitely a key piece of Syscoin’s DeFi LEGO box and Pollum is glad to bring life to the Pegasys.

By incorporating a community-focused governance structure, fair and fluid token distribution model, solid development team as well as great ties to the Syscoin Foundation, Pegasys is empowering traders whilst removing the costly barriers to entry to DEXs for the general crypto user. Liquidity mining and yield farming opportunities will incentivize the growth of a strong liquidity provider ecosystem and long-term token holders that will actively be part of the architecture of an early and potentially huge ecosystem of Pegasys users.

Thank you for joining the Pegasi herd, our team is really excited about what the future holds!