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# What is SnowSwap? Liquidity for Yearn USD Vaults
- URL: https://dexplain.com/what-is-snowswap-liquidity-for-yearn-usd-vaults/
- Published: 2020-09-02T15:30:00.000Z
- Updated: 2021-12-01T15:30:54.000Z
- Description: What is SnowSwap? Liquidity for Yearn USD Vaults. Supply yUSD tokens to earn trading fees and SNOW tokens. Help Yearn ecosystem grow!
- Author: wizardfromspace
- Tags: SnowSwap, Yearn Finance, yield farming, defi, Decentralized Exchange

[SnowSwap](https://snowswap.org/iearn?ref=dexplain.com) is a new decentralized exchange for swapping [yield bearing](https://dexplain.com/tag/yield-farming) stablecoins. Specifically, built for yield bearing [Yearn Finance](https://dexplain.com/tag/yearn-finance) assets. The aim is to eliminate steps from swapping stablecoins, when users want to swap to a different [Yearn DeFi Vault](https://dexplain.com/yearn-finance-vaults-explained/). Instead of having to withdraw and deposit assets again, wasting Eth to high transaction fees. SnowSwap lets you trade between Yearn vaults directly, saving users a lot of headache, cost, and time.

## What is SnowSwap?

At its core the [automated market maker (AMM)](https://dexplain.com/what-is-mooniswap-the-new-automated-market-maker-by-1inch/) is a fork of [Curve Finance](https://dexplain.com/what-is-curve-finance-and-crv/). It uses Curve’s pooling algorithms but it goes well beyond just being a simple copy and paste fork. SnowSwap is an innovative use case for yield bearing stablecoin assets which aims to solve a real problem.

![](https://dexplain.com/content/images/2021/12/comparison-dexs.webp)

Despite over 220 million yUSD tokens being minted, there are no liquid markets for the wrapped stablecoins.

**You May Also Like:**

- [Yearn Finance Introduces StableCredit and YFI Price Surges](https://dexplain.com/yearn-finance-introduces-stablecredit-and-yfi-price-surges/)
- [Value Liquid will feature Flexible Farming](https://dexplain.com/value-liquid-will-feature-flexible-farming/)
- [Double Farming with SashimiSwap](https://dexplain.com/double-farming-with-sashimiswap/)

Exiting vaults can be costly with 0.5% withdrawal fees if their token reserve is low, plus the high gas costs.

**Pools for yVault stablecoins…** By creating liquidity pools for yUSD tokens, SnowSwap solves these problems. The platform is designed to offer low slippage swaps, meaning that when a user does want to exit a vault they could swap into the vault with a large reserve (to avoid paying withdrawal fees).

- You can also earn additional yield from assets by being a liquidity provider. The trading fees are set at 0.04% per swap, which go to the LPs.

**SNOW liquidity mining…** And as an additional bonus, [users will earn SNOW](https://medium.com/@community%5F7384/f-k-making-it-rain-were-making-it-snow-e60b64ad1292?ref=dexplain.com), the governance token for SnowSwap. The team intends to use SNOW to bootstrap the platform’s overall liquidity. With 80% of the token’s total supply being distributed to LPs, this ecosystem looks ripe for yield farmers.