Traditional swap relays on dedicated liquidity pools for swapping tokens. This requires initial liquidity and LPs for building the liquidity pool. Fracton Swap creates pool-less liquidity based on a “Left-Right-Exchange” mechanism. The swap always hold&send tokens on the Left side of ERC721/ERC1155/ERC20 token pairs, and Mint&Burn tokens on the Right side.
By reducing the frequency and the volume of adding data to the Ethereum state, Fracton tackles the state explosion problem by creating a “stateless system” that runs on the Ethereum mainnet with absolute cost efficiency.
Fracton protocol does not add any state variables to be updated for user actions. Furthermore, Fracton protocol reduces traditional token contract _balance state variable updates which:
- Reduce >25% gas in token exchange compared to traditional swap, by its pool-less liquidity design, by mint/burn user address tokens instead of transferring between user address and swap.
- Reduce >50% gas compared to traditional swap in converting BlindBox into People’s NFT, by embedding BlindBox business logic into People’s NFT ERC1155 contract.