Multiswap, a new breed of “multi-asset” decentralized exchange, has launched on Avalanche aiming to reinvent how people access and exchange tokens on-chain. 

Multiswap was built by Eric Forgy and his team at CavalRe to leverage Avalanche’s speed and flexibility to enable traders to swap hundreds of tokens in a single transaction. On Multiswap’s testnet, the record was 340 tokens. Now, anyone can leverage this swapping along with other features the team behind Multiswap calls “groundbreaking.”

In building Multiswap, Forgy leveraged his deep expertise in science and finance. After earning his Ph.D. in computational electromagnetics, Forgy worked on radar systems at MIT Lincoln Laboratory. He pivoted to finance, leading quantitative strategies and risk research for firms in both the U.S. and Hong Kong. 

After the Great Financial Crisis, his mission became to fix capital markets. This is also CavalRe’s mission, and Multiswap is CavalRe’s first release. 

Critically, Multiswap’s pools can contain any number of tokens, including tokenized off-chain assets. This allows for the creation of unique pools. For instance, CavalRe presented a demo of a 500+ token mockup of the S&P 500 in a single Multiswap pool. For traders, this created 125K trading pairs with zero fragmentation of liquidity and extreme capital efficiency.

With such pools, LPs can gain exposure to all pool assets. This aims to give LP tokens properties almost like those of a rebalancing ETF or index fund, only decentralized. LPs may also earn yield from transaction fees. And so instead of paying fees to an asset manager for this kind of market exposure, Multiswap LPs may earn fees. 

Multiswap will be wading into deeply creative pools over time. At mainnet launch, Multiswap’s first pool consists of 10 blue-chip tokens representing 55 trading pairs. Multiswap will be exploring possibilities in FX, commodities, and equity markets. Again, each pool may share similar characteristics, like a separate ETF, so the team sees great potential opportunity in creating specialized pools.

Forgy emphasizes that Multiswap is just the beginning. It’s the first fundamental piece, the engine of a forthcoming CavalRe ecosystem that may power the capital markets he envisions. 

“CavalRe began with the mission to tokenize reinsurance risks, but the basic primitives needed simply do not exist in a scalable form on-chain today,” Forgy said.  “We need to accommodate contingent future cash flows for true on-chain fixed income, so Multiswap is the first stop on a beautiful product roadmap that passes through futures and derivatives on the way to reinsurance securitization and risk transfer, which remains our north star.”

“We believe Multiswap’s reimagination of the AMM shows what’s possible when a creative, talented team harnesses the speed, power, and flexibility of Avalanche to experiment and build a bold new product that expands our possibilities,” said Luigi D’Onorio DeMeo, Head of DeFi and DevRel at Ava Labs. “The Avalanche DeFi community is eager to see how sophisticated individuals and large financial institutions utilize and build upon this powerful new primitive.”

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About CavalRe

CavalRe is on a mission to bring all capital markets on chain. Founded by Eric Forgy in October 2020, CavalRe was on track to become a licensed reinsurer and capital management solutions provider. The pivot to DeFi happened in September 2021 with the realization that AMMs could be used for the efficient pricing of illiquid assets such as insurance risks.

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About Avalanche

Avalanche is a smart contracts platform that scales infinitely and regularly finalizes transactions in less than one second. Its novel consensus protocol, Subnet infrastructure, and HyperSDK toolkit enable Web3 developers to easily launch powerful, custom blockchain solutions. Build anything you want, any way you want, on the eco-friendly blockchain designed for Web3 devs.

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