v1.9. The Next Wave of Improvements
Hey folks, wanted to provide some insight into the next wave of upcoming features and delve into why we think they’re great for Chainflip.
Our typical weekly volume has nearly doubled in the last 2 months alone, even as the market crashed, and we experienced significant downtime during the ByBit incident a couple of weeks ago.
The resulting DEX volume has also led us to become consistently deflationary in the last week too, with the majority of the last few days incurring a net burn of FLIP.
While all of this data is extremely promising, and a testament to the work we’ve put in to get here. The job isn’t done. We have several upcoming catalysts we believe will massively boost Chainflip’s dominance in the cross-chain swapping sector, solidifying our position as the leading protocol for on-chain Bitcoin swaps.
For the team, LPs, and token holders, increasing trade flow is the core objective, it drives everything we work on.
Over the past few months, we’ve made huge progress. Weekly volume has surged, the protocol has handled it well, and we’re now in conversations with some very high-profile partners who want to integrate Chainflip. While we can’t reveal names just yet, it’s clear the momentum is real. People want Chainflip for its offering.
But this is just the beginning.
To truly scale liquidity and volume, and take things to the next level, we need to tackle a few key limitations in the current DEX design. That’s exactly what the 1.9 release is built to do.
Liquidity Constraints
Liquidity remains one of the key limiting factors for the growth volumes for Chainflip. It's one we recognise, and it’s a challenge we’re actively working to overcome.
Encouragingly, we’re now seeing new LPs joining the protocol and adding liquidity more frequently, which is a strong sign of growing interest and confidence.
To support a greater influx of external capital and unlock deeper liquidity, we are focusing on two major initiatives in the upcoming 1.9 development pipeline.
Automated Stablecoin Strategies
Although not quite as core to the Chainflip swapping offering like SOL and BTC, stablecoins remain among the most traded and sought after assets in the industry, and our ability to serve users depends on our ability to source liquidity for every asset we support. Especially in light of the upcoming integrations which will rely heavily on stablecoin liquidity for effective cross protocol routing, we need a solution to reduce our dependency on active LPs to fill this volume.
Automated strategies dramatically simplify the process for passive LPs to provide meaningful liquidity to the DEX.
How do Stablecoin Strategies Work?
Much like Boost, which saw a massive influx of passive BTC liquidity in the past, Automated Strategies will allow LPs to deposit any amount above $20k of stablecoins into a strategy of any stablecoin pool offered on Chainflip.
You as a liquidity provider select a pool and “spread” - or a pair of prices equally distant from $1, and deposit assets into these strategies. The protocol will then automatically place limit orders on behalf of the user with those assets, replacing the orders periodically as each side gets filled. Users will then make money on the difference, generating yield from trade flow between the stablecoins they support.
That yield will vary based on the competition in that pool, the spread selected, and the demand from swappers using those pools.
LPs can set up multiple strategies and multiple spreads in each pool to optimise their yield. Automated or advanced traders can even potentially trade against the more passive liquidity to provide rebalancing services to the network.
Not only will this feature provide a big opportunity to passive LPs in a very low yield market environment, but it also delivers on something many of our users have been actively requesting. By making it easier to participate in liquidity provision, Automated Strategies will introduce more users to LPing on Chainflip, inject substantial stablecoin liquidity to serve swap flow, and excitingly, free up active LPs to focus on the more volatile assets that demand closer attention and offer higher-yield opportunities.
Internal Swaps & General LP Improvements
We have been collecting a lot of feedback from LPs since launch, and 1.9 gives us a big opportunity to implement some of the more recent improvements to make their quality of life even better.
Internal Swaps, in other words, enable LPs to trade directly from within their account, is the big one.
It should improve the market dynamics of the DEX by giving traders some means to dealing with inefficient orders, rebalancing their inventories, and just generally have access to a more flexible trading tools.
We anticipate this will help keep inventories balanced, LPs more profitable generally, and allow for greater specialisation within different LP behaviour, all of which should facilitate better effective liquidity for the end user, and more volume overall, as arbitrage now becomes a more viable trading strategy on the DEX.
There is also the potential to increase the DEX volume by introducing Chainflip gradually as a more generalised spot exchange, competing with Hyperliquid’s new spot offering.
Furthermore, improvements to the LP API to make developing and running market making bots easier is also a worthwhile endeavour. There are a range of changes we’ve been queuing up for a while to make the maths easier to handle, and reduce the overhead associated with running and maintaining the RPC clients.
We will also be deleting LP fees for limit orders and simplifying the amounts in the LP API should make it easier to reason around developing bots and strategies for new integrators.
Additionally, although not strictly tied to the 1.9 release per se, LP documentation needs significant improvements and will be a focus whenever we have time for it.
All of the above should radically improve opportunities and ease of use for LPs, who we continue to treat like first class citizens.
Other Additions
Polkadot’s AssetHub will be added as a chain in the DEX in this release as well. We have received a commitment from the Polkadot Ecosystem as a part of this integration to have $3m in liquidity deployed in the AssetHub USDC pool in order to bootstrap this brand new and unique integration, which we hope will trigger a wave of adoption and usage of this new parachain ecosystem.
What's Next
These efforts will already consume our pipeline for the next few weeks. Beyond that, we should start to consider what else we could do to boost volumes.
However, new initiatives should be secondary to supporting our existing and upcoming integrators, LPs and users. Our iterative growth strategy is working. We need to stay focused and implement the seemingly small improvements, as collectively they move the needle more than a new chain integration or major feature set might. That said, we are always looking at chain integration opportunities.
Conclusion
Despite the recent market chaos, Chainflip is thriving. Volume is up, users are up, and we’re delivering at a rapid pace, even in less-than-ideal conditions. Zoom out, and the picture becomes clear: we’re not just weathering the storm, we’re gaining momentum.
With major upgrades like 1.9 around the corner, bringing in long-awaited LP features, new stablecoin strategies, internal swaps, and the Polkadot AssetHub integration, we’re building exactly what our users and partners have asked for. These improvements don’t just enhance the product; they set the foundation for the next wave of adoption and liquidity growth.
This is just the beginning. The team is shipping as fast as we can, the ecosystem is expanding, and Chainflip is quickly becoming the go-to protocol for cross-chain swaps, especially when it comes to native Bitcoin. If we stay focused and keep building, the rest of the year will hopefully be nothing short of explosive.
We hope you enjoyed this update. We expect to have 1.9 released over the coming few weeks, but stay tuned for announcements. Let us know your thoughts in the community chats!