Cross-chain Aggregation Protocol

O3 Swap is a cross-chain aggregation protocol developed by O3 Labs that lets users exchange digital assets across otherwise isolated blockchain networks from a single interface. The protocol addresses liquidity fragmentation between decentralized exchanges and the transaction barriers that exist between separate chains, providing one-click trading in which the source asset and the target asset can sit on two different networks.

The system has two principal technical components. O3 Aggregators are deployed on mainstream blockchains and search for the most cost-effective trading rates and routes within each network. The O3 Hub is a cross-chain asset pool — for example a stablecoin pool — built on Poly Network, through which cross-chain settlement is executed; liquidity providers can deposit a single token from any of several chains, stake the resulting LP shares, and earn a share of cross-chain transaction fees plus O3 incentives. Architecturally the protocol is described as a framework layer (O3 Wallet, O3 Swap and payment functions) and a settlement layer (the O3 aggregator and cross-chain protocol), with automated market maker, order book and money market features supplying liquidity, plus a platform layer exposing a service API for integration by other applications.

Aggregated liquidity sources include Uniswap, SushiSwap, Curve, Balancer, Bancor, 1inch, Paraswap and 0x Protocol on Ethereum; PancakeSwap, DODO, MDEX, BakerySwap, ApeSwap, BSCswap and JulSwap on Binance Smart Chain; Flamingo, Nash and Switcheo on Neo; and MDEX, LAVAswap, Depth and Chocoswap on Huobi ECO Chain. The native O3 token can be obtained through airdrops for early product testing and community contributions, trade mining rewards, or providing liquidity to the cross-chain pools; tokens are issued locked and are unlocked by supplying liquidity with O3 trading pairs on major DEXs. Total supply is capped at 100,000,000 tokens across two distribution phases of 10,000,000 and 90,000,000.

Founding story

O3 Labs was established in Tokyo in 2017 with the aim of providing digital asset management tools and services, beginning with the O3 Wallet and later extending into cross-chain swapping through O3 Swap.

Business model

O3 Swap is a permissionless, non-custodial protocol rather than a licensed intermediary. Transaction fees generated by the platform are used to buy back the O3 token on open markets, with proceeds distributed proportionally to O3 stakers and development committees. Users interact directly with the aggregator and the cross-chain pools by connecting their own wallets, and token holders receive governance rights, staking interest and transaction discounts allocated from the O3 Swap treasury.

The protocol charges transaction fees on swaps; those fees are used for periodic open-market buybacks of the O3 token, which are then distributed to O3 stakers and development committees. Liquidity providers in the O3 Hub earn a share of cross-chain transaction fees plus O3 incentives.

Traction

O3 Labs reported the O3 Wallet had more than 100,000 users, a community of over 20,000 people, and users in more than 40 countries. O3 Swap itself was in beta testing at the time of that coverage.

Latest developments

During the beta period the protocol supported cross-chain interactions across Ethereum, Binance Smart Chain, Huobi ECO Chain and NEO, with the O3 wallet planned to support all chains and to arrive on mobile, and Solana support announced as forthcoming in the O3 Wallet.