> For the complete documentation index, see [llms.txt](https://sundaeswapzs.gitbook.io/us/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://sundaeswapzs.gitbook.io/us/sundaeswap.md).
# Sundaeswap
What is SundaeSwap? SundaeSwap is a DEX being built on the Cardano blockchain.
Lanningham explained that SundaeSwap is built with an ethos at its heart. What's that? The same way gold used to back US Dollars, crypto's foundations are its trust and security, which provides crypto its value. He also sees SundaeSwap as representing the team's shared vision and opportunity: to decentralize access to and profits from financial services.
Can SundaeSwap Address the Limitations of a DEX? It's true a DEX would do away with the expenses of an intermediary, but you would incur fees for your transaction. That's one limitation not helping in the DEXs" growth since your DEX transaction fees end up exceeding the CEXs" intermediary expenses.
That's not the only limitation though, check out the 3 main limitations of a DEX and how Sundae Swap overcomes them.
1. High Transaction Fees A transaction fee is the fee paid to miners to incentivize them to process transactions. Ethereum, being the trailblazer blockchain it is, is still notorious for charging unpredictably high fees to its users during transactions.
That's why you face large transaction fees if you're using Ethereum-based DEXs, often disproportionate to trading volume. As a result, traders who deal with small numbers won't use DEXs if they can't achieve revenues to cover the transaction fees.
SundaeSwap is built on Cardano, not on Ethereum. It aspires to solve this problem by facilitating faster peer-to-peer transactions with inexpensive transaction fees.
2. Not Enough Liquidity An asset has an optimal price in a DEX only when it presents sufficient liquidity for the asset pair (e.g. ADA/USDT). Without liquidity, the prices for assets with large volumes will dramatically vary within seconds, making them too volatile and unpredictable.
Liquidity improves when more users trade on the platform and deposit their assets in the asset pool. To overcome this, DEXs introduced incentives to maintain more liquidity in the asset pool.
3. Slow Transaction Processing Time DEXs" processing speed can vary, as miners have to confirm transactions before processing. A SundaeSwap blog article mentions Uniswap, as of now, carries out around 70 transactions per minute, according to their current statistics. SundaeSwap intends to have the capacity to facilitate around 120 transactions per minute. Yet, intended capacity can significantly vary from actual number of transactions taking place per minute.
Considering how new DEXs are to the world, it's only fair we give the SundaeSwap team sufficient time and space to come up with transformative upgrades. The day when DEXs would be on par with CEXs on transaction speed is not too far, though. Decentralized applications are rapidly implementing advanced technology in their platform which will help them compete with CEXs.
At present, SundaeSwap may not have released its minimum viable product (MVP) just yet, but they"re doing a great job at marketing it. Making people curious about their platform with their signature branding of sundaes and scoopers. Branding alone is certainly not sufficient to achieve mainstream adoption; but it's definitely a start. We hope that this continues to make DEXs more user-friendly through introducing more tutorials, more themed upgrades and continuing to educate the masses.
Let's check out how SundaeSwap is using Cardano to develop its DEX.
SundaeSwap's Foundation: Building a DEX in Cardano Lannigham described SundaeSwap as benefiting from Cardano's well-built infrastructure. That's why you can't ignore Cardano's role as a decentralized platform when trying to explain what SundaeSwap is. Some Cardano features include:
Proof of Stake (PoS) blockchain platform: Its competitors, like Ethereum, still haven't fully switched to PoS from Proof of Work (PoW). That means Cardano uses validators to verify transactions, requiring less energy and processing time. That way the DEX can process more transactions in less time.
Smart contracts: Cardano launched their smart contracts in September 2021, leading proponents to call Cardano a more resilient platform. Cardano underwent academic research to substantiate the smart contract development, making it one of the most peer-reviewed blockchain platforms in the space.
Sophisticated, full functionality: Cardano is a fully functional platform and may be considered more sophisticated than its competitor Ethereum and attract mainstream users for these reasons.
SundaeSwap's DEX Technology SundaeSwap wants to build a trustless application, with a solid security architecture to facilitate financial services. That way you'll have a reliable platform for your financial transactions.
Trustless but that contradicts everything we"ve been talking about, you'll tell me!
In this context, it means not having to trust an intermediary in the process, and replacing the intermediary with an algorithm. The underlying technology distinguishing a trustless DEX from a CEX is called an Automated Market Maker (AMM). SundaeSwap intends to use a modified version of the Uniswap AMM.
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