What is Nextswap Protocol?

The Nextswap Protocol is an open-source protocol for providing liquidity and trading ERC20 tokens on Ethereum. It eliminates trusted intermediaries and unnecessary forms of rent extraction, allowing for safe, accessible, and efficient exchange activity. The protocol is non-upgradable and designed to be censorship resistant.

The Nextswap Protocol and the Nextswap Interface were developed by Nextswap Labs.

Check out the Introduction section of our docs for more info on the different roles played by Labs, the Interface, and the Protocol.

How does Nextswap Protocol work?

Nextswap is an automated market maker. In practical terms, it is a collection of smart contracts that define a standard way to create liquidity pools, provide liquidity, and swap assets.

Each liquidity pool contains two assets. The pools keep track of aggregate liquidity reserves and the pre-defined pricing strategies set by liquidity providers. Reserves and prices are updated automatically every time someone trades. There is no central order book, no third-party custody, and no private order matching engine.

Because reserves are automatically rebalanced after each trade, a Nextswap pool can always be used to buy or sell a token — unlike traditional exchanges, traders do not need to match with individual counterparties to complete a trade. For a more in-depth description, check out the Concepts from the documentation.