Tokenlon is a decentralized exchange on the Ethereum blockchain based on 0x DEX protocol for atomic swaps. It was created by the imToken mobile wallet team in March 2018, with the aim to provide digital assets exchange services to imToken users. The launch of Tokenlon 4.0 in July 2019, which started providing exchange services via website and trading API, separated it from imToken. It was designed to bring decentralized liquidity to the masses offering secure and reliable trading that does not require trust and has no slippage. On December 22, 2020, Tokenlon 5.0 was released.
Tokenlon differs from other decentralized exchanges by combining multiple liquidity sources, which include off-chain professional market makers and on-chain automatic market makers Uniswap, Sushiswap, and Curve, to offer users the best price. Besides, it uses a Request for Quotation exchange model (RFQ), in which quotes are cryptographically signed. That allows users to trade with 100% price certainty increasing the number of successful trades up to 99.6%.
Tokenlon has 5 development stages: genesis mining (phase 0), tokenomics (phase 1), governance bootstrap (phase 2), open network (phase 3), and cross-chain channel (phase-4). At the time of writing, the exchange is in the tokenomics phase.
Tokenlon exchange features
The Tokenlon exchange has a lot of features that attract its customers and make trading easy and comfortable. Among them are off-chain limit orders and on-chain settlement, instant confirmation, high success rate, price slippage, real-time quotes, and security measures.
The most useful feature refers to the possibility to see the final price before trading to confirm it immediately. The assets exchange process can be completed within the ImToken wallet so traders have no need to deposit funds into their Tokenlon accounts. Moreover, the exchange supports adjusting the transaction slippage based on the type of quote (RFQ or AMM). Real-time quotes provide satisfactory prices for trading pairs. ERC20 sell orders are executed through gas-free transactions that make them very cheap.
To ensure safety, Tokenlon undergoes security audits, providing reports on GitHub, and its DEX contracts are verified on Etherscan. Tokens are exchanged wallet-to-wallet via on-chain atomic swap. For large trades, Face ID is required and the imKey hardware wallet is provided.
The ImToken digital wallet is available for download at Google Play and Apple Store. For developers, the ImToken API documentation is provided. The Tokenlon mobile platform allows users to trade anytime and anywhere from their smartphones responding immediately to the market fluctuations.
Tokenlon Network Token (LON) is an ERC-20 utility token, which builds the core of Tokenlon ecosystem. It was issued to expand it and equalize all parties involved in it. The participants of the LON network include protocol users and referrers, liquidity providers such as market makers and brokers, developers, and governance participants.
The total number of LON issued is limited to 200 million coins distributed in the following way: 130 million LON have been allocated to the community through the LON Network Incentive Plan (LIP), 49,680,000 LON was given to the core team, 10,320,000 LON have been distributed between stakeholders, and 10 million were assigned to the development reserve.
LON has been released to the community via an early user merkle drop (a variant of airdrops where tokens are not sent to intended recipients but are made available for the claim at any time) and liquidity mining.
To increase community participation, Tokenlon has implemented a liquidity incentive plan (LIP) to distribute 130 million LON in two phases: the genesis mining, which was finished during September 26, 2020-December 20, 2020 and the trading mining, which started at the beginning of 2021. 5 million LON were issued as mining rewards for takers, market makers, and referrers. The 70,000,000 LON that belongs to the team, stakeholders and the development reserve will be unlocked and released within two years.
LON use cases
LON tokens are used for a trading fee discount, rewarding, governance, LON liquidity mining program, staking, and referral program.
Users holding LON in their addresses can get a trade fee discount. Rebates depend on the amount of LON coins stored on an account and can reach up to 66%. Trading commissions charged by the Tokenlon protocol are used to buyback LON coins, 40% of which are then transferred to the treasury as reserves for development and promotion of the ecosystem, and staking reward pool to be used for staking rewards. Each buyback initiates LON minting, which is used for rewards in the Tokenlon Incentive Plan.
Tokenlon LON incentive plan allows customers to get staking rewards if they participate in LON staking. In addition, they can stake Uniswap LON/ETH liquidity provider (LP) tokens to Tokenlon’s dashboard to participate in the liquidity mining. A total of 10,000,000 LON are intended to be issued as liquidity pool incentives.
LON gives community members the right to participate in Tokenlon governance and improvement. LON holders can determine the use of the treasury, commission and buyback parameters, and product features. By inviting others to trade on Tokenlon users can receive a 15% referral reward after their invitees complete a transaction. Takers get an extra 5% trading reward for each transaction.
LON is a tradable asset on Tokenlon, Uniswap, OKEx Hoo, DigiFinex, KuCoin, and many other exchanges. Users can buy LON directly on Tokenlon and store their coins in imToken, a secure digital wallet.
Tokenlon team and partners
Although Tokenlon was created by imToken, it also has its own devoted team. Both teams have worked closely since Tokenlon creation, but there is no information on the web about their members. It is only known that Ben He Bin, a product designer and developer, is the founder and CEO of ImToken, and Lucas Huang is the Head of Growth at Tokenlon.
Among the Tokenlon strategic partners are Ethereum, CASH, Polcadot, Cosmos, Enterprise Ethereum Alliance, Consensys, Etherscan, 0x, and Kyber Network. Uniswap (a decentralized protocol for automated liquidity provision on Ethereum), Curve (an exchange liquidity pool on Ethereum), and SushiSwap (a decentralized cryptocurrency exchange built on the Ethereum blockchain) provide liquidity for Tokenlon.