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What is SumSwap?
SumSwap is Sumero’s native decentralised exchange (DEX), accessible via Sumero’s decentralised application (Dapp).
What is a decentralised exchange (DEX)?
A decentralized exchange (or DEX) is a peer-to-peer marketplace where transactions occur between cryptocurrency buyers and sellers. DEXs allow for financial transactions to take place without passing through an intermediary such as a bank, broker, or any other form of financial intermediary. DEXs achieve this through the use of automated algorithms, comprised of smart contracts, that self-execute under set conditions and record each transaction to the blockchain.
What are the differences between SumSwap (DEX) and a centralised exchange (CEX) like Coinbase?
Unlike centralized exchanges like Coinbase, SumSwap and other DEXs do not use an order book to handle transactions and determine the price of a crypto asset based on buy and sell orders. DEXs use liquidity pools, comprising different assets and asset ratios, to facilitate trades whilst rewarding liquidity providers with trading fees derived from trades facilitates by the liquidity pool. While transactions facilitated by a centralized exchange are recorded and stored on an internal centralised database, all transactions carried out on a DEX are settled and stored on the underlying blockchain. Finally, in contrast to centralized exchanges, DEXs are non-custodial, meaning that the user retains full control and ownership of their assets when transacting on a DEX like SumSwap.
How do I interact with SumSwap and the Sumero Dapp?
You can connect and interact with Sumero and Sumswap using a Web3 wallet, such as MetaMask, on your browser or your smartphone. If you are just getting started, we recommend using MetaMask as it provides a beginner-friendly user interface.
Note: When downloading a web3 wallet like MetaMask, make sure you are downloading from the official wallet website URL. Downloading malicious software from phishing websites posing as Web3 software websites is a common hacking vector and will typically result in loss of funds.
You will also need some Ether (ETH) to interact with any application built on the Ethereum blockchain in order to pay gas fees. Gas fees are essentially fees you pay to the Ethereum network in return for the computational resources needed to process and validate your transactions.
How do SumSwap fees work?
SumSwap charges a 0.3% trading fee that is distributed between liquidity providers based on their share of the pool that was used to facilitate the trade.
Ethereum Transaction Fees (Gas Fees)
Ethereum network or gas fees are the fees paid to validators in order to process and validate transactions on the blockchain. Sumero does not profit from these fees as they are paid directly to the network validators.