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Sep 22, 2021

How Tinyman Powers Secure, Decentralized Trading on Algorand

By: Algorand

Centralized exchanges have done a great job at promoting cryptocurrencies, enabling individuals across the globe - including the 1.7 billion unbanked people in developing nations - to access alternative assets and new forms of money.

However, it’s decentralized exchanges (DEXes) that further build on the promise of decentralization. DEXes, along with the entire Decentralized Finance (DeFi) sector, give users even more freedom and control over their finances. 

Tinyman, a new DEX platform built on Algorand, has the ambitious goal of empowering communities of regular people like you and me by encouraging a fair economy that is built upon inclusion and equality. Read on to find out more about Tinyman, the latest DeFi application to launch on Algorand. 

The Origin Story of Tinyman

Tinyman is the result of a confluence of factors, such as the existence of a truly decentralized blockchain network, like Algorand, and the ambition of a talented team led by founder Kaan Eryılmaz. However, the main driving force that led to the development of the DEX, which is expected to grow into an entire DeFi ecosystem, is the need for an equitable economic environment in which everyone could benefit.

Unfortunately, the traditional financial system is creating wealth inequality and economic instability through inflation and debt. According to Oxfam, the world’s richest 1% has more than twice as much wealth as 6.9 billion people. Elsewhere, Credit Suisse said in its Global Wealth Report that adults with less than $10,000 in wealth make up 53.6% of the population but hold only 1.4% of global wealth.

The COVID-19 pandemic has negatively contributed to wealth inequality. While central banks’ monetary policies of zero interest rates and bond-buying programs might have given an immediate boost to economies, these measures have led to accelerating inflation, resulting in the devaluation of national currencies and a widening wealth gap between rich and poor.

Thanks to blockchain, communities can develop alternative ecosystems, as the technology empowers decentralized stable economies where everyone can be a winner. This is the vision of Tinyman, which plans to embrace decentralization to every level. In fact, Kaan Eryılmaz doesn’t want to think about it as his project, as the DeFi ecosystem will focus on the community.

Kaan likes to think that Tinyman is a character in the metaverse that comes from the mystical galaxy ruined by financial debt and wealth inequality, and it comes to earth and falls in love with blockchain technology. Our hero wants to build a financial ecosystem on blockchain, and all Kaan’s team does is help it fulfill its vision.

Speaking about the team, Kaan is supported by two back-end developers, a front-end developer, a smart contract developer, and a designer. The team has a strong background, as Kaan has worked at HipoLabs, which has created UX and UI designs and apps for fintechs, neobanks, trading platforms, and other companies for over ten years. At one point, when Hipo was doing work for Algorand, Kaan, who is in charge of design and crypto projects at Hipo, experienced the blockchain’s great benefits and decided to build a DeFi product on it. 

That’s how Tinyman came out.

How Does Tinyman DEX Work?

The first major application of the Tinyman ecosystem envisioned by Kaan is the decentralized exchange (DEX), which allows users to swap assets at market rates. You can think about it as the Uniswap for Algorand assets. It acts as an automatic market maker (AMM), meaning that the smart contracts enforce all the rules and replace the typical order book function. Thus, Tinyman is a fully decentralized, non-custodial exchange.

As any typical DEX, the main players on the platform are swappers and poolers, or what we call liquidity providers. Swappers are the users who sell cryptoassets from their wallets in exchange for tokens from the platform’s pool. They pay a small fee for the exchange service. Elsewhere, poolers provide liquidity by locking a pair of assets in a smart contract to gain passive income from the transaction fees paid by swappers.

With Tinyman, you can easily exchange ALGO or an Algorand asset for another one. All you should do is connect your wallet with the platform and do the swap. The DEX doesn’t hold user funds, as the exchange operation happens directly between your wallet and the pool.

As a DEX, Tinyman doesn’t require you to go through KYC verification and lets you have full control over your cryptoassets.

Currently, Tinyman provides its testnet version, with the mainnet launch being scheduled for later this quarter.

In the first week of the testnet, the platform saw 4,729 transactions and 78 pools created, some of which had additional liquidity pouring in from multiple providers, reaching 1,169 pool operations and 1363 swaps. In total, 617 accounts were connected to the DEX with MyAlgo Wallets. This performance anticipates the rapid growth of the Tinyman ecosystem and reflects the increasing demand for an Algorand-oriented exchange.

Tinyman Benefits from Algorand Features

Tinyman is the first DEX platform built on Algorand, benefiting from all the unique features of this truly decentralized network. 

Algorand is currently the only network that solves the so-called Blockchain Trilemma by achieving unmatched scalability while not compromising on decentralization and security.

Additionally, Algorand has low transaction fees, enabling Tinyman to charge lower commissions that eventually benefit liquidity providers rather than the blockchain network itself. On top of that, Algorand is exceptionally fast, with each transaction reaching finality in less than 5 seconds.

Another great thing about Algorand is that it’s highly secure thanks to its Pure Proof of Stake (PPoS) algorithm. Another aspect that makes it secure is its programming language known as Transaction Execution Approval Language (TEAL), which allows developers to create smart contracts with fewer mistakes and thus fewer loopholes to be exploited by hackers.

With Algorand, Tinyman can go beyond the DEX and build an entire economic system that is user-oriented and benefits every member of the community.

Get Ready for the Future. 

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