TokenSwap is a simple fixed-price market maker that will buy your memecoins at a fixed price. This is useful for tax-loss harvesting.
The contract is not owned by anyone, but BuidGuidl has been designated as the the target for any donations. This is simply because BuidlGuidl is one of the best places to learn about Solidity + EVM, and they provide one of the best frameworks (Scaffold-Eth2) to work with.
Before you can access TokenSwap, you need to buy access for the princely sum of 0.005 ether. The msg.sender's account is credited with 0.004 ether and the funding beneficiary is allocated 0.001 ether.
Initializing a pool for a specific token consumes 0.001 ether from accounts[msg.sender]. This acts as an anti-spam filter.
Once a pool exists for your specific token, the TokenSwap contract will buy as much of that token from you as you want to sell, at the fixed offer price of 0.001 ether.
Here's the deal:
Once you've sold your ERC20 tokens, that's it.
It's gone forever.
The catch? Well, the BuidlGuidl (or whomever they nominate to take their place) can transfer the ERC20 tokens out. This means that aside from the 0.001 ether fee that they receive for access or new markets, they can go degen on themselves and resell the tokens should the swap price of a memecoin improve.
Each invoice is minted as an ERC721 token with an on-chain SVG invoice from the TokenSwap contract. As near to an on-chain invoice as can be done.
The invoice contains:
- Invoice number
- Seller address
- Token address
- Number of tokens sold
- Price
- BlockNumber
Please note: you are selling your tokens to TokenSwap and the ERC721 issued is not an invoice from TokenSwap to you (the seller), but is the invoice you as the seller issue to the buyer (TokenSwap). It's like you are using a decentralized invoice issuing service. TokenSwap as a piece of autonomous code does not have use for the invoice, or regard for tax regulations, or understanding of local accounting principles. It always remains your responsibility to ensure you comply with your local tax and financial laws.
We've all been there, watching etherscan or the mempool, looking for that new PEPE token, hoping your bag goes to the moon. In most cases, it doesn't. This is not tax advice, please research tax loss harvesting - always look for local information. But the gist of it is that if you sell your tokens to someone for less than what you bought them, you can "capture" this loss for tax purposes (i.e. turning it from an unrealized to realized loss). In the seller's opinion, the tokens sold will never go up in value again. The TokenSwap contract is an expression of the contrary opinion, held for the public good, and with the ability to act on that opinion should sentiment on the token sold change.
There is no mechanism to refund access which you've bought back to you as a user. To keep the potential for loss of funds small a user is only allowed to send 0.005 ether to the contract at a time. If you are using TokenSwap you have already been degen, and TokenSwap won't enable you further.
To start with the target beneficiary is the BuidlGuidl, simply because they've done so much to help onboard devs into web3.
The web3 ethos is built around public goods. TokenSwap is intended as a public good for Ethereum. The idea is that should BuidlGuidl (or whichever target beneficiary is currently slotted in) decide they would like to nominate a different public good, they can pass on the benefit that project by calling nominateTarget.