Abstract
We propose the Universal Token Swapper (UTS), a smart contract acting as a payment processor between buyers and merchants in a multi-token environment for EVM compatible blockchains. UTS gives merchants the ability to accept any token by performing instant conversions. This way, the buyer does not have to convert the tokens before a payment and the merchant is not subject to financial ruins if he does not want bear the risk on speculation on the value of the token received. In addition, UTS can be implemented to follow any regulation by linking the contract to on-chain oracles, bringing regulatory compliance to DeFi and helping merchants take advantage of the new possibilities.
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Notes
- 1.
- 2.
A bonding curve is a mathematical curve that describes a relationship between price and token supply. Generally the bonding curve formula is such that the price increases as the supply of the token increases. While counter-intuitive, that’s obvious once considered that in a bonding curve based token an increase of the supply occurs only as a consequence of an increase in demand [15].
- 3.
Essentially the formula is \(price(tokenA)*price(tokenB)=k\) where k is constant, hence the name.
- 4.
It is possible to practice automated trading strategies, but decisions are made by off-chain algorithms that trigger on-chain trades.
- 5.
See for example https://dune.xyz/phabc/usdt---banned-addresses for a list.
- 6.
We also evaluated the functions pause and unpause. Both require about 27, 000 gwei for the gas. The beforeSwap and afterSwap functions were not reported as they depend on the implementation by M.
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Barbàra, F., Sanino, A., Schifanella, C. (2023). UTS: The Universal Token Swapper. In: Matsuo, S., et al. Financial Cryptography and Data Security. FC 2022 International Workshops. FC 2022. Lecture Notes in Computer Science, vol 13412. Springer, Cham. https://doi.org/10.1007/978-3-031-32415-4_39
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