Cardano's (ADA) price jumped 13% in 24 hours before Thursday's planned launch of SundaeSwap, the first decentralized finance (DeFi) exchange on the Cardano blockchain.
“SundaeSwap will launch as a fully functional beta decentralized exchange (DEX),” the project's developers confirmed in a blog post on Sunday. Projects will be allowed to create trading pools for their tokens after Tuesday, the team added.
Cardano surged to $1.55 in European morning hours on Monday, up from Sunday’s low of $1.28. Charts show $1.55 is a historic resistance level, suggesting some profit taking could occur and potentially push prices downward.
SundaeSwap (SUNDAE), like other decentralized exchanges, uses smart contracts to match token trades between users and distributes a portion of trading fees back to the investors who provide liquidity to the platform, a process broadly known as "yield farming."
Exchange users can earn SUNDAE rewards in the first six months following SundaeSwap’s launch. However, the launch remains a beta rollout with limited features and expected trade matching times of “hours to days” initially.
“While the DEX’s smart contracts have been fully audited and the DEX will meet all industry standards for security, the implementation of fully decentralized governance will not be immediately possible due to existing transaction size limits on the Cardano blockchain,” the team explained in the post.
Top DEXs built on other blockchains are some of the most valuable products in the crypto market. Ethereum-based Uniswap has a market capitalization of about $7.7 billion, while Binance Smart Chain-based PancakeSwap has a market capitalization of $3.2 billion, according to data on analytics tool CoinGecko.
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