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AirSwap is a non-custodial platform for peer-to-peer over-the-counter (OTC) and request for quote (RFQ) trading of Ethereum ERC-20 tokens and non-fungible tokens (NFTs), which enables individuals and trading firms to swap tokens directly with each other.
The platform is decentralized because AirSwap does not control the users’ funds and trading execution is done via smart contracts.
AirSwap’s peer-to-peer swaps are non-custodial and atomic, which the platform claims helps to eliminate counterparty and intermediary risk, since there are no deposits or escrow.
The platform has the advantage of a decentralized exchange (DEX) in that users are in complete control of their funds until the trade is executed, so either both parties get what they traded for or neither does.
Who invented AirSwap?
AirSwap was invented by Michael Oved and Don Mosites, with backgrounds in finance and technology respectively.
Following the publication of the Swap Protocol whitepaper in 2017, the pair created a partnership between their company Fluidity and ConsenSys, and branded the initial implementation as AirSwap. AirSwap launched its network and token on October 10, 2017.
Did you know?
Crypto investors Mike Novogratz, CEO of Galaxy Digital and Joseph Lubin, CEO of ConsenSys, are both advisors to AirSwap.
What’s so special about AirSwap?
Centralized exchanges require users to trust in the exchange to safely keep their money for them and not get hacked, break the law, or make any unwise decisions.
On the other hand, decentralized exchanges in which trades happen completely on the blockchain are vulnerable to issues such as maximal extractable value (MEV), in which miners or validators rearrange transactions in order to extract the maximum possible value from the trade.
By design, AirSwap’s trade execution happens directly from one wallet to another wallet at the same time, which the platform claims mitigates against the danger of front running or MEV.
AirSwap is also a self-sustaining decentralized autonomous organization (DAO), in which protocol fees on swaps are automatically routed to pools that support project governance and development.
What else is different?
AirSwap differs from fully on-chain DEXs like Uniswap in a number of ways.
On-chain DEXs typically use automated market makers (AMM) to determine price during execution based on a constant product formula. These transactions are without intermediaries and involve one party depositing "liquidity" beforehand and another party later taking it.
This means that depositing and swapping against the AMM is easy and does not require makers to be online and available for pricing. However, AirSwap argues that managing pricing strategies on DEXs is limited and costly, with heavier on-chain logic leading to higher gas costs, while front-running and market manipulation are possible.
AirSwap touts its “flexible” protocols, which can support several kinds of trading, between two individuals or an individual and several trading firms, trading ERC-20s, NFTs, and other digital assets. Products utilizing these protocols include RFQ, LastLook, OTC, and NFT marketplaces.
How is AST produced?
In October 2017, AirSwap launched the AirSwap Token (AST). Of the 500 million AST total supply, 150 million were sold during the token launch. Today, around 200 million are in circulation with the remaining tokens held in a multi-signature treasury wallet currently managed by Consensys Mesh.
How do you get hold of AST?
AST is an ERC-20 token that can be traded on AirSwap and other DEXs—or on reputable centralized exchanges like Coinbase and Binance.
What can you do with AST?
AST is a membership token that enables holders to perform a number of different functions. These include:
- Being a maker: AST enables makers to announce their availability on the AirSwap network. Currently the staking requirements for makers on Ethereum are 100K AST for each server and 100 AST for each token supported. These requirements vary depending on the deployed EVM chain.
- Participate in governance: With the introduction of the DAO in 2021, AST now also enables holders to stake to a decentralized governance system and participate in proposal (AIP) votes. Participants in votes earn a claim on a portion of the protocol fees generated by trades on the DEX.
- Earn a swap bonus: Members with staked AST receive a bonus on swaps performed on AirSwap, which essentially directs a portion of the protocol fee directly to the member’s wallet during a swap.
Editor's note: This article was first published in October 2019 and updated in September 2024.