PrivacySwap’s powerful means to crack tax crises in DeFi space
Cryptocurrencies’ existence has been a debated topic over the past few years, the point of contention being if it should stay or not. One of the reasons is its costly gas fees and its possible harm to the environment. Thus, PrivacySwap aims to address this with the release of its two new features: DEX and PrivacyCards.
The high transaction fee is always one of the prominent problems cryptocurrency traders experience whenever they are transacting on the blockchain. So, many traditional investors and those uneducated ones hold back investing in the ecosystem. Though there are solutions to this, this problem remains one of the most notable doubts of many investors.
PrivacySwap understood this problem and wanted to create an ecosystem as a solution. Hence, they announced DEX and PrivacyCard.
Before discussing how these two features could answer this problem, let us discover why gas fees or transaction taxes remain high.
Why do gas fees and taxes remain high?
To complete transactions in cryptocurrency, gas is required. You must pay for any calculation performed on the blockchain when you transmit tokens, interact with a contract, send tokens, or do anything else. That payment is calculated in gas, which is always paid in cryptocurrency.
You must pay for the computation whether your transaction succeeds or fails. Even if it fails, the miners or validators must confirm and execute your transaction, which necessitates the use of processing resources. You must pay for that computation the same way you would for a successful transaction.
Gas and transaction fees are said to remain high due to congestions on the networks. Though there are ways to lower the gas fees, it will return to a least-prioritized transaction. This means your transaction will take longer than usual.
Many alternatives have come out ever since people discovered this disadvantage. However, none seems to satisfy users.
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Present solutions for the current problem
Ethereum, being the second-largest cryptocurrency in the market, has an expensive gas fee reaching $51.45, on average. Polygon is one of the present solutions to the emerging risk of expensive gas fees.
Though Polygon fees are cheap, the platform is often questioned for not being a proper scalable solution. Since it doesn’t use Ethereum as the mainnet, users consider it unsecured.
Ethereum tried to answer this concern by releasing EIP-4488. EIP-4488’s main goal is to help reduce transaction fees on the Ethereum network’s L2 solutions.
This idea was offered by Vitalik Buterin and Ethereum developer Ansgar Dietrichs to lower L2 gas expenses in the short term while more efficient long-term alternatives are being explored.
EIP-4488 aims to reduce L2 gas expenses even further by lowering calldata costs.
Vitalik mentioned that it is possible to increase the amount of data available today using rollup methods. Buterin also advocated a shift in attention to rollup solutions, which he sees as a short-term option to reduce gas costs.
Rollups are the most recent scaling approach to make headlines in the Ethereum community. A smart contract interacts with an Ethereum transaction. Because of Ethereum’s limited block capacity, transaction confirmations are slow, and gas fees are high.
Rollups offload data processing to the Ethereum mainnet and deliver valid proofs. Less data is committed to the mainnet since transactions can be pooled.
The gas fee is then distributed equitably among all customers. Rollup provides near-instant transaction speeds and decreases costs by many orders of magnitude while retaining the security and decentralization of the Ethereum mainnet.
EIP-4488 is conceivable in accordance with Optimistic Rollups and ZK-Rollups. However, this solution will likely introduce a new issue — block size.
PrivacySwap DEX and PrivacyCard: How do these answer the problems?
Though EIP-4488 is a probable answer to such an expensive fee, it only answers the ethereum problem. PrivacySwap’s DEX aims to address all the supported coins’ trading and gas fee problems. How? It is simple.
As a yield farming platform, PrivacySwap initially uses other DEX platforms such as PancakeSwap. From the moment you transfer your digital assets to Metamask, transfer it(BNB) to PancakeSwap, convert it to PRV2 or PRVG, and approve the contract until staking, every transaction accumulates gas fees. Thus, making it expensive.
The platform is releasing its DEX; thus, it will now eliminate the third-party DEX transaction that will accumulate an extra gas fee. This will also reduce extra steps, which saves you more time.
PrivacyCard will eliminate possible gas fees of converting your digital assets to fiat. From DeFi, you can now view and manage all your digital assets through a web3 wallet. It will also save you time since your crypto assets are withdrawable in any supported ATM terminals. So, you can cash out all your cryptos as fiat as soon as you want it with a minimal to zero gas fee.
Not to forget that both these services are secured and private.
These are only some of PrivacySwap’s fantastic features that will change the way you utilize DeFi. The platform will soon release more privacy-centric features to reduce all the possible gas fees imposed in every transaction.
Conclusion
As more users use the blockchain ecosystem, the network becomes more congested. Though there are solutions present today, users still see these solutions as lacking and unsatisfying. Thus, PrivacySwap sees this as an opportunity to offer the DEX and PrivacyCard to answer the problem.
Moving forward, as DEX, PrivacySwap promise to do a continuous update to make sure that the platform is usable and flawless.
Before they completely transition into an actual DEX, it is a fantastic opportunity to buy your PRV2 or PRVG tokens. Thus, you can enjoy PrivacySwap’s excellent benefits once the DEX is launched.
If you are interested, check them out on their social media platforms and official website below.
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