The new Avalanche Dapp allows traders to exchange hundreds of different tokens in a single transaction

A team of developers building on the Avalanche blockchain has launched a trading tool that allows users to exchange up to 300 different tokens in the same transaction.

Multiswap from the CavalRe team has recorded the highest number of token swaps in a testing period with 340 different tokens, developers said at a panel in Seoul last week.

Decentralized exchanges (DEX) liquidity pools typically allow traders to exchange one type of token for another. Multiswap's code creates a liquidity pool with many different tokens that can be easily traded with each other, allowing multiple trades to occur in a single transaction.

A liquidity pool is a bunch of cryptocurrencies locked in a smart contract. This creates liquidity for faster transactions. Users who supply tokens to the pools are called liquidity providers (LPs).

The new tool allows users to set up more complex trading strategies, such as those that involve different tokens and need to be completed quickly and with low fees.

“Think of it like a new kind of decentralized ETF,” CavalRe founder Eric Forgy said in a message to CoinDesk. “On Testnet we have a pool of over 500 tokens that, for demo purposes, represent a model of the S&P 500 representing over 125,000 trading pairs with no liquidity fragmentation.”

“All liquidity of each token is available for trading with any other token in the pool. To reproduce this on Uniswap would require 125,000 separate pools, which simply fragments the available liquidity,” Forgy said.

Still, due to the inherent nature of sophisticated blockchain-based applications, security risks still exist and users need to be careful, Forgy said.

“No software, whether on blockchain or not, could ever claim to be free of security risks. For example, there was recently an exploit because certain contracts were written in an older version of Vyper, a Python derivative, due to a bug in the compiler. It’s very difficult to defend against these things,” Forgy told CoinDesk.

“We are confident in the soundness and security of the Ethereum Virtual Machine (EVM) used by Avalanche’s C-Chain, where we originally deployed it,” he said. Solidity is the programming language used to write smart contracts on the Ethereum blockchain.

In the coming months, Multiswap will explore expansion opportunities in the form of tokenized foreign currencies, commodities and stocks.

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