Terraswap is a Uniswap-inspired automated market-maker (AMM) protocol implemented with smart contracts on the Terra blockchain. This enables a decentralized on-chain exchange for the various assets involved in Terra ecosystem.
Terraswap users can become trader, liquidity provider or both.
A trader can exchange their token for another token through Terraswap using the price determined by the liquidity pool ratio.
Liquidity provider adds equal value of two assets to their corresponding Terraswap pair pool, which increases liquidity for the corresponding pair market while maintaining the pool price. In this process, liquidity providers are rewarded by newly minted LP tokens. LP tokens represent the liquidity provider’s share in the pool and provide the benefit of earning trading fees, which are accumulated into the pool on every swap transaction. Liquidity providers can burn their LP tokens to withdraw their share from the pool.
Terraswap Web Application #
Terraswap Web Application is the official web front-end interface swapping Terra native tokens and CW20 tokens. The web application is located here.
Terra Station Extension is required to interact with Terraswap Web Application.
Currently, Station Extension is only available for Google Chrome.
First, Terra native tokens must be sent to the wallet address corresponding to your Terra Station Extension in order to execute swaps from the web application. Once you generate a transaction in the proper format, Station Extension will prompt you to sign the transaction by entering your password.