NeoSwap: Litepaper

This is a light introduction to NeoSwap, this is not intended to be a deep technical exploration but to introduce curious users or investors to the concepts behind NeoSwap.  For further information please reach out to any of the founders via Discord, Twitter or Linkedin and we would be happy to answer further questions.

What is NeoSwap 

NeoSwap is a multi-item, multi-party swap protocol, currently working on Stacks Blockchain. NeoSwap unlocks liquidity in a way that has never been possible, finding multi-way trades you would previously have been unable to discover.

The trades found in NeoSwap can involve NFTs and currency, and multiple parties. This unique proposition brings a whole new angle to barter, this is called Neo-barter.

Neo-barter can revolutionize how commerce is conducted globally, but first, we begin with NFTs…

Problem

The world, not just crypto, is full of illiquid items and items of subjective value or both. This is especially true in the NFT space where floor prices are misleading.

Trades of these items are currently only peer-to-peer or via traditional marketplaces with 1 buyer/1 seller. This is not the most efficient allocation of resources amongst groups of people and figuring out these trades in person/without technology has previously been impossible.

Solution 
We solve the liquidity issue for illiquid and subjectively valued items by finding multi-way trades involving multiple parties for the most efficient allocation of resources. We create win-win-win trades.


NeoSwap

Did you know that 65% of listed NFTs never sell?  By some estimates the NFT market in 2021 surpassed $40 billion in marketcap. This means billions in liquidity is locked up in secondary markets. Everyone has items they don’t want and other people have items they desire.

Maybe they have enough currency to buy the NFTs they want, or maybe they don’t. They are still left with illiquid items that they are, at best, agnostic to.

Our platform brings multiple parties together- and each person can be a buyer, seller or both- all in one transaction.

By having multiple parties in the room we are able to find trades that wouldn’t be possible in traditional 1-1 sales and marketplaces.

At multiple points, these trades can be interdependent. This creates new solutions. You may send an NFT or currency, or a mix to a person you are not receiving goods from, but you don’t mind because this unlocks the ability for someone else in the trade to send goods you want to you.

This is an important point to wrap your head around.

How?

Based on the data read from on-chain and provided by the participants in the party (listings, reserve prices, bids, and budget), the optimal multi-way trade pattern and the corresponding optimal allocation of NFTs are found using novel combinatorial optimization algorithms. The solution found by these algorithms provide the maximum possible utility to every participant in the party.

Smart contracts are, at their core, an agreement to reassign ownership when various conditions are met.  So, once we know what trade is best, we write the corresponding smart-contract and everyone benefits!

NeoSwap will be a layered system of market-making protocols. Assets will flow at the base layer to where they are more valued.

We start with parties, where we are able to gather data on individual utility while providing economic and social value to users.

Next we have a recommendation layer, where NeoSwap’s AI discovers and recommends novel trades to users outside of parties

Finally we have an automated layer, an always-on automated system which will continuously rebalance portfolios of illiquid assets. 

Roadmap

1. Parties - we are running multiple public parties every day where we invite early users, this is proving to be an excellent learning ground as we continue to refine and improve the UX and practical processes. 

2. AI layer - data from parties used to train AI to recommend multi-way trades outside of parties.  Partygoers receive emails with proposed trades they can accept or reject.  If everyone accepts a proposed trade then we write the smart contract.

3. Launch on Solana and establish traction there before launching on Ethereum

Team 

We have assembled an incredible team, the 3 Co-founders have been working together for the past 3 years at John Ennis’ other business and have an extremely strong working relationship:

Founders:

Dr. John Ennis - CEO and Co-Founder (Twitter, Linkedin)
John is a successful serial entrepreneur, including his AI business Aigora which has multiple Fortune 500 clients. 

John has a PhD in Mathematics and a Post Doc in Computational Neuroscience

Jakub Kwiecień- CTO and Co-Founder (Twitter, Linkedin)
Masters in Theoretical Physics

Experienced in ML, algorithmic development and data science. Head of AI at Aigora

Hamza Diaz- CXO and Co-Founder (Twitter, Linkedin)

Director of Technology at Aigora. Full-stack developer with a background in Computer Science and Communications

The rest of us!:

Dr. Ali Haydar Ozer- Head of Research (Linkedin)
Professor of Computer Science at Marmara University, Istanbul, and global expert on combinatorial optimization and e-market design.l market design

Pawel Kurzeja- Head of Operations (Twitter, Linkedin)
Former IBM Project Manager with a background in in finance, corporate banking, and strategic management

Kieran Parker-Moroney - Head of Strategy (Twitter, Linkedin)
Previously PI Labs VC Associate, founded Blockchain Recruit, early investor & participant in crypto space. Also a contemporary art collector for the past 8 years.

Shudufhadzo Nemulalate- Head of Outreach (Twitter, Linkedin)

NFT artist, CTO at Atlegang Digital Assets, cryptocurrency educator, advocate against crypto scams in Africa.

Case study/example trade

A few different examples might be helpful to introduce readers to the concepts behind NeoSwap, including live trades being done on our platform right now!

Yes, you read that right, this is not theoretical. NeoSwap is hosting multiple NeoSwap Parties every day involving up to 25 participants!

Bob has hundreds of NFTs, some of which he loves, some of which he is…less keen on. Perhaps he got them at a blind mint, or he is no longer as in love with the visuals as he once was. He listed them on a marketplace, but hasn’t had much luck. A few have sold but most haven’t.

Alice is in the same position as Bob.  

And funnily enough, so is almost every NFT collector. However, maybe other people out there like the NFTs you don’t.

So what do they do? They come to a NeoSwap room with a group of others. Everyone puts their NFTs in the room and sets reserve prices for them.

On the next stage, everyone gets to ‘bid’ on the NFTs others have brought to the room.

Now you set a budget. This is best thought of as a 'supplementary budget', which can top up a transaction if needed. This means you cannot overspend and you might not even spend your budget to get what you want.

You can bid on as many items as you want and NeoSwap will optimise what you get for the budget you set.

You may sell enough items to not even need to spend any currency!

For more info, we wrote a step-by-step guide on Sigle you can find here: https://app.sigle.io/kieranpm.id.stx/Iw8yGDzrr82_7c3wjvhYT

And a quick 6-minute Loom video taking you through an example trade here: https://www.loom.com/share/967771c766b2474e8641eca295a16b0b

Let’s look at a few trades below, we will start with a simple one:

You can see here how the different trades are interdependent. 

Marjorie sending Dulb 1 STX means Dulb will send Kieran a Free Punk.

This allows Kieran to send Marjorie a Stacks Dragon. 

Marjorie and 3Hunnatheartist also both send 0.5 Stacks to Hamza which allows Hamza to send a Candy to Dulb.

So Marjorie gets the Dragon she wanted, but none of the currency she sent actually goes to Kieran!

That is NeoSwap in a nutshell. An all-sided marketplace where everyone can be a buyer and a seller.

We are able to handle extremely complex trades this way. Just look at this figure below, involving 14 people, multiple NFTs and currency! 

MORE INFO

Visit our website at www.neoswap.party
Follow us on Twitter here
Join our Discord here