Hedging Swap Scalability

As we know, Hedging Swaps were initially deployed on the Ethereum network for its security and to accompany the ongoing security improvement work (audit and immunefi Bug Bounty program). However, this choice has resulted in significant transaction fees.

Over the past 7 months, the DeFi landscape has evolved, and many financial derivatives protocols have experimented with scaling solutions, particularly Layer 2 optimistic rollups. We’ve seen the success of these rollups in this article

It highlights how major protocols like GMX and Synthetix have opted for L2 solutions and now have some of their volumes and TVL there. Other protocols, such as Gains and Perp Protocol, have also chosen L2 optimistic rollups.

Given these developments, the MetalSwap team decided to run a testnet on Optimism.

Now, it’s time for the Governance to manage this topic.

We need to consider whether it’s beneficial to deploy Hedging Swaps on a chain with lower transaction fees and, if so, which chain would be the most suitable.

Looking forward to a fruitful discussion!


As I anticipated in the Italian community, it’s time to explore the solutions to increase the efficiency of the hedging swaps tool. Optimistic rollups are the first target.

One of the reasons why Optimism is very interesting is obviously its “proximity” to the Synthetix ecosystem.

Very interesting are also the zk-rollup solutions, but these are still in r&d phase…


I don’t know the technical development differences, in addition to Optimism, Arbitrum is also having a good growth and always takes security from Ethereum. Might it make sense to think about expanding into Arbitrum as well?


It surely make sense.
The advantage of evaluating the options in the best possible way and then choosing a single solution is that of not dispersing liquidity too much in the pools. Low liquidity would limit the opening of hedge positions.
Technically speaking, the two solutions (Optimism and Arbitrum) are very similar. It is therefore necessary to evaluate the one that brings more collateral advantages to MetalSwap.


Let’s keep in mind that EIP-4844 is coming this year.
The timing could be perfect to finally speed-up the real usage of MetalSwap…

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Of course it does!

Arbitrum is performing wonders and its growth over time is undisputed. However, I now believe that the focus of governance should be directed towards other points. Let me explain:

The key factor in choosing Optimism lies in the concept of “following the money,” or in the case of MetalSwap, following those entities that can provide significant incentives to the dApp itself. For example, Synthetix could provide significant value in the development of derivatives on MetalSwap.

Based on these points, I think Optimism is a valid choice, even though this may not prevent us from moving to even more scalable chains in the near future while always following the above-mentioned concept and/or the need for development of the dApp itself.


I understand don’t waste liquidity; I think L2 will be used mainly by retailers that don’t move big capital, so adding more protocols would allow the product to reach more users. If in the future large companies want to use swaps for large amounts, I don’t think they will worry about ethereum fees

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certainly the choice of Optimism is an excellent step towards the reduction of costs for individual Swap operations which would allow a better possibility of operating also at a speculative level and not only of financial coverage of the assets owned. Obviously being able to enter with the big players on the market, such as Binance, could certainly increase trading volumes, but it is also true that with this situation many people are passively observing the evolution of this world

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Why I think Optimism could be the best blockchain to bring MetalSwap’s hedging swaps:

  • We will greatly reduce Ethereum’s transaction fees.
  • Optimism is one of the blockchains that appears to solve the scalability problem for Ethereum the best, so a promising future for this blockchain can be expected.
  • Compared to Arbitrium, Optimism still has a relatively low TVL, so MetalSwap could more easily secure a prominent position within this blockchain.
  • Optimism has an incentive system for new dApps that could help us with our growth

Which incentive system are you referring to? could you link it? Thank you

Optimism offers grants to the best dApps that become part of its blockchain. This process is divided into cycles and we have now reached cycle 11, watch it here. This could be a great opportunity for MetalSwap!


Well, as for the grants made available to Optimism. In the eventuality Metalswap receives OP, how will these be managed?

Typically, these funds are used to incentivize the usage of the product or to develop new features or protocols