Overview
QuipuSwap is the primary DEX on Tezos, built by Madfish Solutions. The protocol provides AMM swaps with both constant product and stableswap pools, farming rewards, and governance voting mechanics. QuipuSwap has iterated through multiple versions to improve capital efficiency. Tezos is a technically sophisticated blockchain with on-chain governance and formal verification capabilities, but its DeFi ecosystem has never achieved meaningful traction despite years of development.
Smart Contracts
QuipuSwap's contracts are written in Michelson/LIGO (Tezos's smart contract languages). The AMM implementation includes standard pool types with governance features. Tezos smart contracts benefit from the chain's formal verification capabilities, which can mathematically prove contract correctness for certain properties. The engineering quality is solid for a Tezos DEX.
Security
Tezos's formal verification capabilities provide a theoretical security advantage. QuipuSwap has been operational for several years without major exploits. The Tezos DeFi ecosystem is small enough that individual protocols face limited adversarial testing. Madfish Solutions is a known development team with a track record in the Tezos ecosystem.
Liquidity
Low liquidity in absolute terms. QuipuSwap holds a significant share of Tezos DeFi TVL, but Tezos's total DeFi TVL is tiny compared to Ethereum, Solana, or major L2s. Major pairs (XTZ/USDT) have modest depth; the long tail is very thin.
Adoption
QuipuSwap is the most-used DEX on Tezos, but that's a small distinction given Tezos DeFi's limited size. The platform serves Tezos loyalists and users interacting with Tezos-based assets (notably some NFT and art-focused projects). Cross-chain users rarely venture to Tezos for DeFi purposes.
Tokenomics
QUIPU token provides governance and farming rewards. The token's value is tied to QuipuSwap's fee generation, which is minimal given low trading volume. The tokenomics are standard for a DEX — the limitation is the underlying ecosystem activity, not the token design.
Risk Factors
- Tezos DeFi ecosystem is extremely small and shows no signs of significant growth
- Low liquidity across all trading pairs
- Tezos has failed to attract DeFi developers despite technical merit
- Competition from Plenty and other Tezos DEXs fragments the small market
Conclusion
QuipuSwap is a competent DEX on a chain that the DeFi market has largely passed by. The 2.4 score reflects quality engineering constrained by Tezos's failure to build a meaningful DeFi ecosystem. The technology is there; the users aren't.