The decentralized automated market maker SegaSwap (https://sega.so/swap/) is aiming to boost liquidity on the Solana-based Layer-2 network Sonic SVM after closing on a seed funding round that brings its valuation to $10 million. The round was led by Sonic SVM and 10K Ventures, and the funds will be used to kick-start SegaSwap’s protocol and incentivize more DeFi users to explore the Sonic ecosystem and its novel “attention capital markets” that launched earlier this year.
SegaSwap is building a comprehensive DeFi ecosystem on the Sonic SVM, with the goal being to entice investors to deploy capital on the L2 by offering various rich rewards. At its heart, SegaSwap’s AMM is all about trading Sonic SVM- and Solana-based tokens, which it supports through permissionless liquidity pools.
It offers a range of tools for launching new assets directly on SegaSwap to encourage the creation of new pools. Investors who deposit tokens in its pools will earn regular LP rewards, as well as additional ecosystem rewards and “Sega Points”, which may later be eligible for a token airdrop.
SegaSwap’s main goal is to deepen liquidity on Sonic SVM, which is a Solana-based L2 network that aims to provide numerous advantages to Web3 gaming and other decentralized applications. In addition to the usual benefits of L2s, such as lower cost and faster transactions, it also allows developers to tap into its attention capital markets, which provide a system through which developers can capture, quantify and monetize user engagement and trade that value.
A tool for trading tokenized engagement
In essence, Sonic SVM makes it possible to transform user engagement into measurable on-chain value that can then be “tokenized” and traded among participants. The theory is that, because more and more human value-generating activity lives online, human attention has therefore become an extremely valuable resource. But until now, there has been no way to capture it.
Sonic SVM changes that, and its attention capital markets can form the basis of more meritocratic economies where developers are rewarded based on verified user engagement. These rewards can then be shared with the most engaged dApp users, and in turn, this will lead to a flywheel effect, encouraging the organic growth of dApps by aligning the incentives of developers and their communities.
SegaSwap’s AMM provides a vehicle for users to trade this attention capital. It’s building a two-tier liquidity pool structure on Sonic SVM, with the “main pools” being reserved for established assets, and “attention pools” for newer ones. By having two kinds of pools, SegaSwap makes it simple for users to identify the most volatile assets and increase the rewards for them accordingly, to compensate for their risky nature.
In both types of pool, the bulk of the trading fees will flow back to liquidity providers, though the “attention pools” will receive a larger share due to the higher risk they entail. As the assets in an “attention pool” mature, they’ll increase their ranking on a public leaderboard that measures their trading volume and total value locked, until they meet the criteria to become a “main pool”, at which point the liquidity rewards will be reduced.
One of the key assets for investing in SegaSwap’s pools is SegaSOL, a liquid staking token that lives on the Solana mainnet. It’s similar to LSTs on Ethereum, and allows investors to retain their staked SOL and invest it elsewhere to boost their staking yield.
Sonic SVM Chief Executive Chris Zhu exuded his belief SegaSwap will play a key role in the growth of attention capital markets, routing attention and liquidity to the dApps where it’s earned. “SegaSOL and the two-tier pool design give builders practical tools to bootstrap markets without relying on short-term incentives,” he explained.
The funding from today’s round will be essential for SegaSwap to increase its momentum, and will be spent on developing deeper routing capabilities, ecosystem-reward integrations and the creation of new pool types. In addition, the capital will go towards further LP incentives and create more use cases for Sega Points ahead of its anticipated token event in future.
