Why This New DEX on Kaspa Is Deliberately Using ‘Old’ Tech—And Why It’s Genius

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Nov 25,2025

By Joshua

Introduction: The Challenge of a New Frontier

Launching a new decentralized exchange (DEX) on an emerging blockchain is a high-stakes endeavor. For a new ecosystem like Kaspa, the challenges are immense, from bootstrapping enough liquidity to prevent punishing slippage for traders to simply educating a new user base. Many new projects try to solve this by copying the latest, most complex models from established ecosystems.

However, a new contender, Zealous Swap, is taking a surprisingly different and thoughtful approach. Instead of chasing trends, its whitepaper reveals a design philosophy rooted in first principles, deliberately rejecting the DeFi community’s recent obsession with complexity in favor of what a new ecosystem truly needs: deep, unified liquidity and an accessible user experience.

This article explores five of the most surprising and impactful design choices from the Zealous Swap whitepaper that set it apart from the crowd.

Five Surprising Takeaways from Zealous Swap

1. They’re Starting with “Old” Tech—And It’s a Genius Move

In a DeFi space that constantly hypes the “next big thing,” Zealous Swap’s decision to build on the V2 Automated Market Maker (AMM) architecture feels counter-intuitive. V3 models with their “concentrated liquidity” are the current trend, so why go back? The reasoning is a masterclass in strategic, context-aware planning.

• Deeper Liquidity: V3 models often fragment liquidity across multiple fee tiers and user-defined price ranges. For a new ecosystem where liquidity is scarce, this can be disastrous. Zealous Swap’s V2 approach ensures that all liquidity for a trading pair is in one single, unified pool. This creates deeper markets, reduces price impact, and provides a better trading experience from day one.

• Simplicity for Users: Providing liquidity in V3 requires active management and a deep understanding of market dynamics to set profitable price ranges. V2, by contrast, is far simpler. This lowers the barrier to entry for everyday users who want to become Liquidity Providers (LPs), encouraging broader community participation and helping to solve the initial liquidity bootstrapping problem.

By choosing a battle-tested and simpler model, Zealous Swap prioritizes user adoption and foundational stability over features that may be ill-suited for the Kaspa ecosystem’s current stage of growth.

2. Your NFT Just Became a Lifetime Discount Code

Zealous Swap introduces a novel dual-fee system built in partnership with the NACHO KAT NFT collection, transforming a digital collectible into a powerful utility token. This isn’t just a marketing gimmick; it’s a core component of the protocol’s growth strategy.

The system offers two tiers with a clear fee distribution:

• Standard Users: Pay a 0.3% swap fee, which is split between Liquidity Providers (0.25%) and the protocol treasury (0.05%).

• NACHO KAT NFT Holders: Pay a discounted 0.2% swap fee, split between LPs (0.17%) and the treasury (0.03%).

The “why” behind this is what makes it so clever. It leverages the existing, passionate NACHO KAT community to accelerate user adoption while providing immediate, tangible utility to the NFTs. For a trader with $1M in monthly volume, this discount translates to $12,000 in annual savings, creating a powerful and immediate ROI for the NFT. This drives an “economic flywheel” where the success of the DEX and the value of the NFT collection become mutually reinforcing.

By creating privileged arbitrage opportunities and a tangible fee advantage, the NFT-based system is designed to attract high-frequency traders and market makers, creating a positive feedback loop between trading volume, liquidity depth, and the NFT’s inherent value.

3. They Offer Two Fee Tiers Without Splitting the Pool

At first glance, offering two different fee tiers seems to contradict the core benefit of the V2 model—a single, unified liquidity pool. How can the protocol offer a discount to some users without forking the liquidity?

The technical insight here is elegant. The fee differentiation happens at the interface level during transaction execution, not at the core pool level. The process is mathematically sound: a user submits a swap for tokens. The protocol first deducts the appropriate fee (0.3% or 0.2%) to create a net amount. It is this net amount that is used to calculate the output against the x*y=k formula, leaving the pool’s core logic untouched.

This means that the underlying pool’s math remains identical for every single trade, regardless of who is trading. It completely avoids the liquidity fragmentation seen in V3 DEXs where different fee tiers require entirely separate pools. Zealous Swap’s approach gets the best of both worlds: targeted user incentives and the deepest possible liquidity for everyone.

4. The Protocol’s Safety Nets Also Make It Stronger

Long-term sustainability is a major focus of the Zealous Swap design, which incorporates two key safety features: Protocol-Owned Liquidity (POL) and an Insurance Fund (IF).

• Protocol-Owned Liquidity (POL): A portion of protocol fees is used to build up a permanent base of liquidity owned by the protocol itself. This ensures stable trading conditions and protects against “mercenary” capital that might flee during market downturns.

• Insurance Fund (IF): Another portion of fees is sent to a separate fund designed to protect users and cover losses in the event of a potential security exploit.

But here is the most clever part of the design: a portion of protocol fees are contributed to both the POL and the IF in the form of LP tokens. This is a powerful, self-reinforcing mechanism. The very act of funding the protocol’s sustainability and security simultaneously and automatically deepens the overall liquidity.

The design is also nuanced: POL is a permanent foundation of liquidity that will never be sold. The IF’s LP tokens, however, can be liquidated in an emergency. This makes the IF a liquid emergency fund that still contributes to the protocol’s depth during normal operations—a truly thoughtful design.

5. They’re Building a ‘Smart’ Fee Engine for the Future

While the V2 foundation ensures initial stability, the whitepaper reveals a forward-looking vision with its Modular-Fee Engine. This system is designed to move beyond a one-size-fits-all fee structure by allowing adaptable fee tiers customized for different types of token pairs.

The most powerful example is its application to stablecoin trading. The Modular-Fee Engine will allow Zealous Swap to offer significantly lower fees for stablecoin-to-stablecoin pools, such as:

• Standard Fee: 0.05%

• NFT Holder Fee: 0.03%

This feature demonstrates a long-term plan to achieve V3-like capital efficiency where it matters most—without compromising the core protocol’s simplicity. It positions the DEX to attract different types of trading volume as the Kaspa ecosystem matures, proving the design isn’t just built for today, but engineered to evolve with the market’s needs.

Conclusion: A Masterclass in Purpose-Built Design

Zealous Swap stands out not because it has the flashiest new technology, but because every design choice feels deliberate and purpose-built. It is a thoughtful solution tailored specifically to solve the real-world challenges of building a DeFi ecosystem from the ground up on a new frontier like Kaspa.

By prioritizing deep liquidity, user accessibility, and sustainable tokenomics, the project provides a compelling case study in strategic protocol design. It leaves us with a crucial question for the future of decentralized finance: As the multi-chain world expands, will the most successful protocols be those that clone the latest features, or those that, like Zealous Swap, meticulously match their architecture to their ecosystem’s unique stage of maturity?

Project website

Why This New DEX on Kaspa Is Deliberately Using ‘Old’ Tech—And Why It’s Genius

Introduction: The Challenge of a New Frontier

Five Surprising Takeaways from Zealous Swap

1. They’re Starting with “Old” Tech—And It’s a Genius Move

2. Your NFT Just Became a Lifetime Discount Code

3. They Offer Two Fee Tiers Without Splitting the Pool

4. The Protocol’s Safety Nets Also Make It Stronger

5. They’re Building a ‘Smart’ Fee Engine for the Future

Conclusion: A Masterclass in Purpose-Built Design

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Why This New DEX on Kaspa Is Deliberately Using ‘Old’ Tech—And Why It’s Genius

Introduction: The Challenge of a New Frontier

Five Surprising Takeaways from Zealous Swap

1. They’re Starting with “Old” Tech—And It’s a Genius Move

2. Your NFT Just Became a Lifetime Discount Code

3. They Offer Two Fee Tiers Without Splitting the Pool

4. The Protocol’s Safety Nets Also Make It Stronger

5. They’re Building a ‘Smart’ Fee Engine for the Future

Conclusion: A Masterclass in Purpose-Built Design

Add Your Voice to the Conversation Cancel Comment

The Ultimate Crypto Social Media Growth Guide

Should You Hire an Agency?

X SPACES GROWTH GUIDE 2025

Feature in major press

Get featured on major press sites

Helping you grow smarter, faster with Bond Finance.

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