As part of the ongoing efforts to ensure the long-term sustainability of the ApeSwap DEX and create the best possible trading experience for users, ApeSwap has entered into a partnership with Wallchain to create a new routing experience for certain trades. The first stage of this partnership includes ApeSwap’s Bonus Router, which rewards with a “Swap Bonus” if a trade meets certain conditions.
As of June 30th, 2022, when a user submits a trade through the ApeSwap DEX, instead of going directly through the standard ApeSwap Router, trades are checked through an Upgrade Service to determine if it qualifies for an “upgrade” - in other words, ApeSwap will apply backrunning strategies to find any applicable arbitrage opportunities that can be captured before that transaction is processed.
If the Upgrade Service does not find any arbitrage opportunities, or if the token is a reflect token, the user’s trade will be processed through the ApeSwap Router as normal, and no swap bonus will be added.
However, if the Upgrade Service does find an arbitrage opportunity created as a result of the trade, the transaction will be automatically “upgraded” to ensure that any profit created by that arbitrage opportunity is captured as part of the transaction. From the user’s perspective, the only difference is that the new Bonus Router trade route will be displayed to them prior to confirmation, along with the amount of the Swap Bonus that they will receive in addition to their original target token.
NOTE: Swap Bonuses are always paid in the native token of the applicable network (BNB for BNB Chain, MATIC for Polygon, ETH for Ethereum).
When the Upgrade Service identifies an arbitrage opportunity and passes a trade through the Bonus Router, it automatically collects all applicable profit from that particular arbitrage opportunity. The Bonus Router then distributes that profit as follows:
30% - back to the user in the form of a Swap Bonus
20% - to Wallchain
50% - to ApeSwap DAO
This ensures that ApeSwap can retain the value created by an arbitrage-inducing trade, while still returning some of that value directly back to the user (for creating the trade in the first place) and to Wallchain (for facilitating the infrastructure that allows the profit to be captured).
Trades that materially affect the balance of the liquidity pools between a particular token pair, resulting in an arbitrage opportunity that the Bonus Router can then capture profit from, will receive a Swap Bonus. In other words, relatively large trades, especially those between token pairs with lower liquidity levels, may result in a Swap Bonus.
Our initial testing estimates that about 3% of all trades on the ApeSwap DEX can expect to use the Bonus Router and therefore generate a Swap Bonus.
The amount of the Swap Bonus varies based on a number of factors, including the amount of the trade, the token pair, and the amount of liquidity available on either side of the token pair in the liquidity pools used along the trade route.