What is your project name?
What is your project website?
Give us an elevator pitch for your project (describe in 1-2 sentences)
Cherry Swap is building interest rate swaps on DeFi which enables anyone to hedge or speculate on interest rates in the Ethereum lending market.
Go into detail around what you are building (1 paragraph max)
Cherry Swap is building an automatic market maker to offer interest rate swaps on top of the existing DeFi stack. Through interest rate swaps DeFi users can either secure a fixed rate or speculate on changing interest rates in the DeFi lending market. Cherry Swap’s implementation is unique in that it uses an automatic market maker which always offers a algorithmically defined rate that is calculated as a function of current market demand and pool liquidity. The pooled liquidity has a liquidity token associated with it which represents fractional ownership in the liquidity pool plus any profits generated from offering the swaps.
Who are you building for and why would they use your product? (What problem do you solve? What are your key use-cases and value propositions)
Our initial target market is the DeFi community at large. Any borrower or lender who currently uses DeFi would be interest in interest rate swaps. As our product is built out, our market extends to any Dai user who wants to invest and lend out their Dai at a guaranteed rate.
The problem we are solving is the volatility of interest rates in the DeFi lending market. The rate you can get on Compound fluctuates per block depending on the number of borrowers and lenders in the lending pool. This makes DeFi lending a hard sell for risk averse users as their returns are not guaranteed as a lender and their costs are unbounded as a borrower. Additionally, there is currently no way to speculate on the fluctuation of interest rates within DeFi lending markets.
Cherry Swap’s interest rate swaps solve both these problems by enabling users to take a long or short position on interest rates over a period of time. This enables a trader to swap the compound.finance floating rate for a fixed rate (a short position) or to pay fixed and receive float (long position) over the duration of the swap. This provides investors with the ability to hedge, speculate, and manage risk while borrowing and lending within the DeFi market.
The introduction of the liquidity token creates a new asset class that will in theory yield higher interest than the current liquidity tokens, like cDai, from the profit generated from offering interest rate swaps.
What do you want to achieve in the next 8 weeks?
-Finish implementing the smart contracts for our automatic swap market maker
-Implement new user interface
-Gain more popularity on social media and grow our following. User base will be the most important KPI for this grant for us
Have you decided on a business model? (not important, just helps us gather more context)
We want to avoid the introduction of a fee if possible. Our business model will be to initially provide liquidity in the Cherry Swap Lending pools to capture the profit generated from market operation. In time other liquidity providers will join and share in the profit as the market grows. Additionally there are components of the infrastructure that pay incentives for outside operators, such as initiating a payout of a swap position. We can provide the infrastructure to operate these and take the fees in the beginning until there is more competition for these services.
What stage is your project at? (Idea stage, ready to launch, ready and live?)
Developed the proof-of-concept during ETHBerlin hackathon where we won the open track. Since then we have been working on developing Cherryswap v2 which includes a new swap model, an automatic market maker and pooled liquidity system. Our goal is to have this system done by the end of the cohort.
How many people are working on this project and in what time capacity? (part-time, full-time, casual etc.) + share links to the profiles of the core contributors
We have five people working on the project. Some are working part time and some are casually on their free time.
Chris Maree: Full Stack Developer, financial math & mechanism design working part time
Haythem Sellami: Smart Contracts Developer working casually
Chris Fulford: Front End Developer working casually.
Liesl Eichholz: UX/UI Designer working casually.
Sabine Bertram: Smart Contracts Developer financial maths & mechanism working casually
Have you received any funding from other sources? If so, from where?
Winnings from EthBerlin. We Also received funding from the Binance X Fellowship Program.
Why do you want to work with dancing chilli (the MetaCartel)?
We believe that a heavily under-utilized force to be reckoned with in the crypto ecosystem is memes. This is part of why we styled and designed our app the way that we did: to make it memorable and start a discussion. We want to meme Cherry Swap into existence and use this to drive adoption and platform usage. There is no better group to help us with this than MetaCartel!
On a more serious note we think that MetaCartel’s connections and community will be invaluable in helping us find product market fit and validating what we are building. The MetaCartel has extremely useful experience all along the web3 stack and can help us reach our true potential.
Share with us a meme that you find funny (post the link)
What is your email?
What is your telegram handle?
chris_maree hsellami naughtyhash circlo sabinebertram