ConsenSys Case Studies MetaMask Swaps: Removing User Frictions from P2P Trading

Edit This Case Study Record

	MetaMask Swaps: Removing User Frictions from P2P Trading ConsenSys

MetaMask Swaps: Removing User Frictions from P2P Trading

ConsenSys

Technology Category	Application Infrastructure & Middleware - Blockchain Platform as a Service (PaaS) - Connectivity Platforms
Applicable Industries	Finance & Insurance
Applicable Functions	Procurement
Use Cases	Machine to Machine Payments
Services	Software Design & Engineering Services
Challenge	The year 2020 saw the largest scale adoption of decentralized exchanges (DEXs). Compared to centralized exchanges, DEXs offer more pairs when trading, provide access to a greater diversity of tokens, and enable non-custodial swaps that keep funds safer. However, DEX users often don’t receive the best price when there is insufficient liquidity, or if a particular DEX doesn’t offer the most attractive price. Before MetaMask Swaps, users needed to navigate many DEXs to compare prices and swap tokens. However, using a single DEX or DEX aggregator did not always yield the best price for every trade, as each aggregator performs differently under different circumstances. Additionally, users needed to approve each token on each DEX, incurring expensive gas costs. Read More
About Customer	The customer in this case study is the user base of MetaMask, a cryptocurrency wallet which is also a web browser extension. These users are individuals who engage in peer-to-peer trading using various liquidity protocols. They are likely to be tech-savvy and knowledgeable about decentralized finance (DeFi) and blockchain technology. They are also likely to be global users, as the use of blockchain and DeFi is not confined to any specific geographical location. The users were facing challenges with disjointed trading experiences, multiple approvals, and high gas costs. Read More
Solution	MetaMask and Codefi together built Swaps, a feature that enables any Web3 or DeFi user to easily access the tokens they need for the sites they use. This gives users the flexibility to shop for the best decentralized exchange rates before making their purchase, via real time pricing information from multiple sources, a secure, reliable digital wallet, and the convenience of the MetaMask app or web browser extension. By drawing information from the largest decentralized exchanges in the ecosystem, MetaMask Swaps allows users to access real time pricing information from a variety of sources all from the safety of their wallet. In addition to solving the price inefficiency problem, the Codefi Markets team also sought to improve user experience across multiple protocols. Each protocol (and the user interface that comes along with it) involved different paths to complete a trade. The Codefi Markets team abstracted these flows for MetaMask customers and provided a user interface for previously unconnected decentralized protocols, simultaneously providing solutions for both price inefficiency and user experience. Read More Log in to view content
Contents

Technology Category

Application Infrastructure & Middleware - Blockchain

Platform as a Service (PaaS) - Connectivity Platforms

Applicable Industries

Finance & Insurance

Applicable Functions

Procurement

Use Cases

Machine to Machine Payments

Services

Software Design & Engineering Services

Challenge

The year 2020 saw the largest scale adoption of decentralized exchanges (DEXs). Compared to centralized exchanges, DEXs offer more pairs when trading, provide access to a greater diversity of tokens, and enable non-custodial swaps that keep funds safer. However, DEX users often don’t receive the best price when there is insufficient liquidity, or if a particular DEX doesn’t offer the most attractive price. Before MetaMask Swaps, users needed to navigate many DEXs to compare prices and swap tokens. However, using a single DEX or DEX aggregator did not always yield the best price for every trade, as each aggregator performs differently under different circumstances. Additionally, users needed to approve each token on each DEX, incurring expensive gas costs.

About Customer

The customer in this case study is the user base of MetaMask, a cryptocurrency wallet which is also a web browser extension. These users are individuals who engage in peer-to-peer trading using various liquidity protocols. They are likely to be tech-savvy and knowledgeable about decentralized finance (DeFi) and blockchain technology. They are also likely to be global users, as the use of blockchain and DeFi is not confined to any specific geographical location. The users were facing challenges with disjointed trading experiences, multiple approvals, and high gas costs.

Solution

MetaMask and Codefi together built Swaps, a feature that enables any Web3 or DeFi user to easily access the tokens they need for the sites they use. This gives users the flexibility to shop for the best decentralized exchange rates before making their purchase, via real time pricing information from multiple sources, a secure, reliable digital wallet, and the convenience of the MetaMask app or web browser extension. By drawing information from the largest decentralized exchanges in the ecosystem, MetaMask Swaps allows users to access real time pricing information from a variety of sources all from the safety of their wallet. In addition to solving the price inefficiency problem, the Codefi Markets team also sought to improve user experience across multiple protocols. Each protocol (and the user interface that comes along with it) involved different paths to complete a trade. The Codefi Markets team abstracted these flows for MetaMask customers and provided a user interface for previously unconnected decentralized protocols, simultaneously providing solutions for both price inefficiency and user experience.

Impact #1	The best price every time: By requesting prices from all available aggregators, along with individual market makers, Swaps ensures that every MetaMask user always has access to great liquidity, the largest selection of tokens, and the most competitive prices.
Impact #2	Fewer approvals: No need to approve every token on multiple DEXs and aggregators for each trade. With Swaps, users only need to approve each token once, reducing gas costs and shortening the path to executing a swap.
Impact #3	Reduced gas costs: Each aggregator pursues a different path to locate the best trade. Each route requires a varying amount of gas fees to execute the transaction. Swaps sources the best prices and determines which aggregator is the most gas efficient for every trade.

Impact #1

The best price every time: By requesting prices from all available aggregators, along with individual market makers, Swaps ensures that every MetaMask user always has access to great liquidity, the largest selection of tokens, and the most competitive prices.

Impact #2

Fewer approvals: No need to approve every token on multiple DEXs and aggregators for each trade. With Swaps, users only need to approve each token once, reducing gas costs and shortening the path to executing a swap.

Impact #3

Reduced gas costs: Each aggregator pursues a different path to locate the best trade. Each route requires a varying amount of gas fees to execute the transaction. Swaps sources the best prices and determines which aggregator is the most gas efficient for every trade.

Benefit #1	Service fee of 0.875% is automatically factored into each quote, which supports ongoing development to make MetaMask even better.

Benefit #1

Service fee of 0.875% is automatically factored into each quote, which supports ongoing development to make MetaMask even better.

Download PDF Version

Overview

MetaMask Swaps: Removing User Frictions from P2P Trading

Operational Impact

Quantitative Benefit