AlphaSwap Tutorial

AlphaSwap
7 min readFeb 6, 2024

Preparing Your ALEO Wallet

You’ll need to get the Leo Wallet specifically designed for the Aleo testnet, which can be downloaded from the official website.

https://leo.app/

After installation, you can follow the official guide to create your testnet wallet.

Additionally, AlphaSwap supports Fox Wallet and Soter Wallet, which can also be downloaded and used from their respective official websites.

Claiming Aleo Test Credits

New users can claim Aleo Test Credits daily by visiting the official Aleo faucet.

https://faucet.aleo.org/

Follow the prompts to send a text message and receive your test credits. Moreover, you can directly claim 5 Aleo Test Credits through the AlphaSwap faucet.

https://app.alphaswap.pro/faucet

AlphaSwap experience

Homepage Features

Visit the AlphaSwap homepage to access various functions such as Assets, Swap, Pools, Faucet, and Info. There are also options to adjust settings and connect your wallet.

Wallet Connection and Settings

To connect your wallet on AlphaSwap, click on the ‘Connect Wallet’ button located in the top right corner of the interface. After signing in, your Aleo testnet wallet will be connected, and the interface will display your wallet address. This allows the platform to interact with your wallet for transactions and asset management.

The settings button allows you to adjust the allowable slippage for transactions, with a default set at 0.5%. You can select any value you’re comfortable with to manage the degree of price change you’re willing to accept during your trade execution.

Faucet

Due to the absence of a unified token protocol on Aleo, to explore AlphaSwap, users must claim the platform’s own test tokens. This can be done through the Faucet feature accessible via the navigation bar. After clicking the claim button and signing with your wallet, the test tokens will be allocated. It’s important to note that due to Aleo’s slower network confirmation times, receiving these tokens might take a few minutes. These tokens are solely for testing purposes and hold no real value or efficacy.

Wrap/Unwrap

AlphaSwap introduces the Wrap/Unwrap feature to support the ARC20 token protocol within the Aleo ecosystem, enabling the trading of ARC20-compliant tokens. For instance, Aleo Credits must be wrapped into WALEO before they can be traded on the AlphaSwap platform. Users can also unwrap WALEO back into Aleo Credits at any time.

Notably, the Wrap function is designed for the privacy-focused conversion of Aleo Credits; publicly received Aleo Credits through the faucet need to be privatized using wallet tools before wrapping. For example, Leo Wallet allows for the conversion between public and private states of Aleo Credits.

Asset Management

Accessing the Assets feature allows you to view all AlphaSwap assets in your wallet. For privacy protection, private assets are not displayed by default but can be revealed by opting to “Manage my private token.” Furthermore, tokens can be toggled between public and private states, enhancing user control over asset privacy. Detailed steps for this process are provided in tutorial section 7.

Swap Functionality

Currently, AlphaSwap has launched its public trading feature (Basic Swap), offering a trading experience similar to Uniswap. Users select the token pair they wish to exchange, enter the amount, and confirm the swap by signing the transaction with their wallet. This process awaits confirmation before the trade is finalized.

In the future, AlphaSwap plans to introduce private trading functionality. This will allow users to execute transactions without disclosing their address information, enhancing privacy protection during trades.

Liquidity Pool

AlphaSwap currently offers public Liquidity Pools, allowing users to select two types of tokens to add liquidity and earn fees from traders’ transactions. Adding liquidity is straightforward: click “Add Liquidity,” select the desired tokens and amount, and confirm by signing with your wallet.

Your liquidity assets (LP Tokens) can be managed in the “My Pool” section, where you can also remove liquidity to reclaim the original tokens.

Future updates will introduce private Liquidity Pool features, enabling liquidity provision without exposing your address, thereby enhancing privacy and potential earnings.

Privacy Conversion

Our product will support Aleo blockchain’s privacy trading features, requiring users to manage private tokens. This function allows the privatization of any number of public tokens, making them unassociated with your address. You can also re-publicize these private tokens at any time.

Note that due to the token’s privacy nature, managing private tokens requires a signature to access your wallet’s private token balance. You can switch tokens between public and private states based on on-screen prompts, enhancing your asset privacy management.

Private Swap Experience

To engage in private swaps on AlphaSwap, ensure your wallet contains private tokens, which can be managed following the guide in section 6.

When initiating a private swap, selecting the input and output tokens and specifying the amount will display the expected outcome. The complexity of private swaps due to implementation mechanics warrants attention to several factors that could impact the transaction.

1) Due to the UTXO (Unspent Transaction Output) model, it’s often not possible to trade the entire balance of private tokens in a single transaction. The platform will display the maximum amount that can be input for the transaction, requiring multiple transactions to move all intended private tokens.

2) In private swaps, it’s not always possible to receive the full amount in private tokens. A portion of the output tokens might be public, sent to an address specified by the user.

3) Price impact refers to how a trade affects the token’s price, particularly noticeable when the liquidity pool is small and the trade volume large. Traders should be cautious of this as it can significantly affect transaction costs.

4) The “Wear Ratio” indicates the acceptable level of slippage for a private swap, akin to the slippage in public swaps but compensated through public tokens to ensure the transaction’s success. A portion of public tokens is reserved to mitigate potential slippage, with unspent public tokens potentially returned to the user, necessitating a designated address for these returns. The platform suggests a default wear ratio of 0.5%, suitable for the majority of trade scenarios.

5) The refund address feature in privacy swaps allows users to choose whether to receive unspent public tokens. Enabling this feature requires specifying a separate address for returns to maintain transaction privacy. Disabling it means forgoing any unspent tokens, prioritizing privacy over token recovery. Careful selection is advised due to the privacy implications.

Once you’ve entered all the necessary information for a private swap, click on the “Private Swap” button to submit your transaction. Then, patiently wait for the transaction to be successfully completed to view the updated balance in your wallet.

Conclusion

AlphaSwap stands as the inaugural DEX built on the Aleo blockchain, melding the traditional features of Uniswap, such as token swapping and liquidity pools, with Aleo’s privacy-preserving technology. It brings forth innovative solutions for trading and providing liquidity with privacy tokens, enhancing users’ privacy without compromising on capital efficiency. AlphaSwap is committed to further advancing in the Aleo DEX space, promising to deliver more cutting-edge and user-friendly functionalities in the future.

About AlphaSwap

AlphaSwap (previously AleoSwap) offers private, secure, and smooth trading experience on the Aleo blockchain.

Official Website | Twitter | Discord | Telegram

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AlphaSwap

AlphaSwap offers private, secure, and smooth trading experience on the Aleo blockchain.