Zealous Swap: An Overview

Zealous Swap is an Automated Market Maker (AMM) decentralized exchange (DEX) implemented on the Kaspa blockchain. Positioned as a core DeFi protocol within Kaspa, the project states its mission as "Pioneer the future of Defi on Kaspa." The platform targets a primary role as a liquidity layer for on-chain trading and features a partnership with Nacho the Kat for an NFT-driven fee mechanism, protocol-owned liquidity, and a V2 AMM architecture intended to cultivate deep liquidity.

History

The public-facing presence of the Zealous Swap initiative began in 2022, and the project achieved multiple development and market milestones during 2025.

• April 2022: The official project X (formerly Twitter) account was created.
• April 8, 2025: An updated version of the project's whitepaper (V3.0) was published.
• May 2025: The protocol's smart contracts underwent a security audit by the firm Hexens.
• June 11, 2025: The results of the Hexens security audit were made public.
• November 15, 2025: The platform's second airdrop ("Airdrop 2") became available for eligible users to claim. On the same day, the ZEAL token was listed for trading on the MEXC centralized exchange.
• November 27, 2025: A feature allowing users to preview their "Expected Earnings" before providing liquidity was launched.
• December 1, 2025: The platform was updated to allow existing liquidity providers to view projected earnings for their current positions.

Overview

Zealous Swap is a DeFi protocol built for the Kaspa network and was founded by backend developer Louis Saad and full-stack developer Ramy Lahoud. The protocol's principal aim is to enable secure, efficient peer-to-peer token trading by improving capital efficiency and supporting a sustainable environment for traders and liquidity providers. As an AMM, it substitutes conventional order books with on-chain liquidity pools, enabling asset swaps to occur automatically through smart contracts.

To meet these objectives, the protocol incorporates several core mechanisms. It employs a modular fee configuration that can be tuned to evolving market conditions and implements Protocol-Owned Liquidity (POL), where a share of platform revenue is allocated to build a permanent liquidity reserve governed by the protocol. This strategy seeks to maintain stable, deep liquidity for trading pairs over time. Security is also emphasized, with an on-chain insurance fund created to protect user assets and a complete security audit executed by Hexens.

Products

Zealous Swap's product lineup focuses on decentralized trading, yield opportunities, and staking within the Kaspa ecosystem. The primary offering is the swap functionality, which enables users to exchange one cryptocurrency for another without intermediaries. Supporting this feature are liquidity pools where participants deposit asset pairs to act as liquidity providers (LPs); these LPs receive a share of the trading fees generated by their pool.

For yield-building, the protocol runs farms where users can stake their Liquidity Provider (LP) tokens to earn extra rewards, typically paid in the native ZEAL token. A dedicated staking option called the "Infinity Pool" permits users to stake ZEAL directly. The platform also supports NFT staking, linking unique tokens to the fee system to confer advantages to stakers. Additionally, the "Expected Earnings" tool, launched in November 2025, lets users simulate a deposit to preview projected APR and returns prior to committing funds.

Features

Zealous Swap incorporates a set of features intended to distinguish its capabilities and enhance user experience. A notable planned capability is MEV (Miner Extractable Value) resistance, which aims to include protections against value-extraction tactics such as front-running that can occur on public blockchains.

Fee mechanics

The platform employs a combined dual-fee approach that merges a modular-fee engine with an NFT-based membership tier.

In normal trades, 0.25% of the fee goes to liquidity providers and 0.05% goes to the protocol treasury. For NFT-holder trades, 0.17% goes to LPs and 0.03% to the treasury.

Liquidity and security features

• Modular-Fee System: This flexible structure allows for adaptable fee tiers based on the characteristics of a trading pair. For standard token swaps, the fee is 0.3%. For stablecoin-to-stablecoin pairs, the fee can be as low as 0.05%.
• NFT-Based Fee System: Through a partnership with Nacho, the protocol integrates the NACHO KAT NFT collection. Holders of a NACHO KAT NFT receive a 33% discount on trading fees. For these users, the standard swap fee is reduced to 0.2%, and the stablecoin swap fee is reduced to 0.03%. This discount is applied at the user interface level to ensure the underlying mathematical consistency of the liquidity pool.
• Protocol-Owned Liquidity (POL): A portion of protocol revenue is algorithmically used to purchase its own liquidity provider tokens, creating a permanent, protocol-controlled liquidity base. This POL is intended to never be sold but can be reallocated between different pools via future DAO governance votes.
• Insurance Fund (IF): A protective fund, financed by a portion of treasury fees, is established to compensate users in the event of a smart contract exploit. The fund is held as LP tokens that contribute to protocol liquidity but can be liquidated in an emergency to cover user losses.
• Flash Swaps: The protocol supports flash swaps, allowing users to borrow any asset from a liquidity pool with no upfront capital, use it in an external transaction, and repay the loan within the same transaction block.
• Price Oracles: Zealous Swap provides a reliable on-chain price oracle using a time-weighted average price (TWAP) model. This is designed to supply accurate price data for other dApps building on Kaspa, such as lending or derivatives platforms.

Ecosystem

Zealous Swap is presented as a foundational component for decentralized finance on the Kaspa blockchain. Being the first announced Automated Market Maker DEX on the network, the project seeks to establish the essential infrastructure for liquidity and token swapping. This role is commonly viewed as a prerequisite for a wider array of decentralized applications (dApps)—including lending protocols, derivatives services, and other DeFi projects—to emerge and prosper on the network.