BEAUTY IN THE FRIDGE

How this Malaysian startup plans to improve the current DeFi ecosystem

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Malaysia has a very clear stance on cryptocurrency, in the sense that the Securities Commission (SC) enforces strict regulations on digital asset exchanges (DAX). As of now, we have 4 registered DAX in Malaysia: Luno Malaysia, SINEGY Technologies, Tokenize Technology, and MX Global.

But there are entities that currently fall outside of similar regulations, one example being decentralised exchanges (DEX).

Simply put, a DEX is a type of cryptocurrency exchange that allows for direct peer-to-peer cryptocurrency transactions to take place online.

There’s no shortage of DEX in the market, but more recently a new Malaysia-based one has cropped up. Called RimauSwap, it has a vision that goes beyond just being another DEX in the decentralised finance (DeFi) ecosystem.

Chasing more than just profits

RimauSwap operates on the Binance Smart Chain (BSC) and its underlying source code, or smart contract, is based on PancakeSwap, the biggest DEX on BSC with total value locked (TVL) of US$10.32 billion at the time of writing.

The team behind RimauSwap noticed that there was a growing interest in DeFi amongst Malaysians, but also observed that the DeFi market still lacked a sustainable ecosystem, and that there was no DeFi project that focused on giving back to society.

Perhaps one of the biggest features that sets RimauSwap apart from other DEX is that it wants to create a sustainable localised DEX via Environmental, Social and Governance (ESG) programmes in the DeFi ecosystem.

Dictionary Time: The Environmental, Social and Governance factors are a subset of non-financial performance indicators which include ethical, sustainable and corporate government issues such as making sure there are systems in place to ensure accountability and managing the corporation’s carbon footprint.

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A crucial part of the RimauSwap ecosystem will be its native utility token, $RIMAU. These tokens are “reward eligible” revenue shares in RimauSwap, through which holders can earn from the profits generated.

According to the team, this is how it should work. “By design, after rewarding liquidity providers with 68% (0.17% of every trade made) of liquidity pool trading fees, 20% (0.05% of every trade made) is used to buy back $RIMAU, making it a deflationary crypto asset and driving its value up in the long run.”

To create a positive social impact on the Malaysian community, RimauSwap claims that it will:

  • Channel 20% of its DEX trading fee revenue towards making the RIMAU token a deflationary crypto asset that appreciates in the long run; and
  • Pledge revenue extraction from RimauSwap DEX to external DeFi yield farming and channel the proceeds from this to the sustainable ESG ecosystem.

Did you know: Yield farming is the practice of staking or lending crypto assets in order to generate high returns or rewards in the form of additional cryptocurrency. In short, yield farming protocols incentivise liquidity providers (LP) to stake or lock up their crypto assets in a smart contract-based liquidity pool.

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With the ESG ecosystem being an important focus of RimauSwap as well, we wanted to know how the DEX could be held accountable for channelling contributions to charities, as it shared in its roadmap.

RimauSwap’s plans for a sustainable ESG ecosystem / Image Credit: RimauSwap

“We will assist the identified recipient in opening up an account with one of the 3 local licensed DAX. RimauSwap will transfer the digital asset to the account of the recipient, and they can cash out through legal means,” the team replied.

But at this pre-launch state, they are first focused on gathering Malaysian support.

Gaining users’ trust

Contract source code verification is one way to provide transparency for users interacting with smart contracts.

Dictionary Time: A smart contract is a self-executing contract with the terms of the agreement between buyer and seller being directly written into lines of code. The code and the agreements contained therein exist across a distributed, decentralised blockchain network. The code controls the execution, and transactions are transparent, trackable and irreversible.

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RimauSwap’s contract source code has been verified on BSC BlockExplorer BSCScan, which is a search engine that allows users to look up, confirm and validate transactions that have taken place on the BSC blockchain.

Decentralised apps (dApp) like RimauSwap are not controlled by anyone, and any bugs in the code may be prone to attacks. Upon an attack, users will be unable to recover funds. This is why proper auditing by trusted auditors is crucial.

In line with that, the team shared that they are also working on getting their smart contracts audited by trusted certification providers like CertiK, PeckShield, Hacken, and the like.

By Malaysians, for Malaysians

Cryptocurrency is generally borderless, but the team still feels that it’s important to define itself as a Malaysian-specific DEX. They believe more Malaysians should learn about and be onboarded onto the DeFi economy so they can find alternative income streams, especially during the pandemic.

“The DeFi opportunities are enormous, and the sky’s the limit for the innovations of open-source community projects, especially ones that give back to the community,” the team shared.

“There are very few projects with the vision and mission to give back to the society—most, if not all, are focusing on high annual percentage rate (APR). It’s time that DeFi community projects really focus on and involve the community.”

In order to make RimauSwap more accessible to locals, its DEX features a user interface that’s available in Bahasa Melayu, and it also has Telegram channels for the Malay-speaking Malaysian community.

The team is also working on making RimauSwap Muslim-friendly and will pursue to make its operations Shariah-compliant.

Editor’s Note: The above paragraph has been edited to reflect a greater accuracy of the statement.

There is likely no slowing down for the decentralisation of the economy and businesses in the coming years. The RimauSwap team looks forward to a future whereby the local relevant authorities have gained enough experience and references to come up with guidelines that enable, rather than restrict, further development and expansion of the DeFi economy.

  • You can learn more about RimauSwap here.
  • You can read more crypto-related articles here.

Featured Image Credit: RimauSwap

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