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They can use their coins to create trading pairs.ĭODO is an ERC-20 token and forms DODOEx’s native currency. LPs don’t incur price risks when depositing their own tokens. LPs share the network’s transaction fees. By unlinking the base and quote tokens, LPs can use any asset type at their disposal. Liquidations, auctions, and other on-chain activities powered by smart contracts can utilize liquidity from DODOEx. There’s a possibility of having price differences between other exchanges and DODOEx which can be commercialized by arbitrageurs. Although the protocol is decentralized, DODOEx traders have enough liquidity close to what is offered by centralized platforms. Under these circumstances, DODOEx presents numerous advantages to traders and LPs Advantages of DODOEx to Traders Interestingly, this results in less risk and allows liquidity providers (LPs) to use the token at their disposal.įor instance, if it’s an ETH-DAI trading pair, the LP has to deposit either ETH and DAI. DODOEx – Proactive Market Maker (Image credit: “DODO: A Revolution in On-Chain Liquidity” Medium Article)įurthermore, apart from shifting the curve, DODOEx unlinks the base currency from the quote currency in a trading pair. Consequently, the section around the market price is considerably flat, ensuring sustained liquidity provision and utilization. Why? Because, being a proactive formula, it reacts to the changes in the market price to effectively shift the price curve in a similar direction. DODO Exchange (Image credit: DODO Exchange Website) How DODOEx Uses PMM to Beat AMMĬompared to Uniswap’s AMM, DODOEx’s PPM has a better trading amount-vs-price curve. Therefore, in an AMM scenario, there’s a huge difference between the liquidity provided and the liquidity that is actually in use. One disadvantage of equally allocating funds is that only those funds with a close connection with the market price get utilized in trades. Notably, the new algorithm differs greatly from the AMM approach common with popular DEXs and/or DeFi platforms such as Uniswap and Curve.Finance.įor example, instead of spreading funds uniformly over a price range, PMM allocates funds with close respect to market prices. Simply put, DODOEx is a decentralized liquidity provider using a new market making strategy. The third co-founder, Diane Dai, she started the first subscription-based WeChat channel that focuses on DeFi in China called DeFi Labs.Īpart from the influencing team, DODOEx is also backed by many prominent investors such as Framework Ventures, DeFiance Capital, Pantera Capital, Binance Labs, Coinbase Ventures, Alameda Research, SevenX Ventures and more. #Dodo coin crypto software#
Before entering into the crypto industry, Wang used to worked as a software developer for firms like Pure Storage and Oracle. He is the founder of DOS Network, a China-based layer two oracle project. He used to worked for a China-based DeFi project called DDEX as the key developer of the project. He was a Physics PhD dropout from Peking University. Mingda Lei, he is the architect behind this new market-making algorithm for the protocol.
BackgroundĭODOEx, founded by three veterans in the blockchain industry, who has huge influencing power in China’s DeFi Community – Mingda Lei, Qi Wang and Diane Dai.
Here, we take a close look at DODOEx, its contribution to the DeFi world, as well as what makes it unique. As a result, platforms such as DODOEx are using a fined-tuned formula known as proactive market maker (PMM) which provides minimum slippage and improved fund utilization.
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Unfortunately, in the DeFi scene, the AMM approach has faced challenges as to how to address issues such as slippage and impermanent loss effectively. Instead, smart contracts sit at the center of the trade with liquidity pools providing the reserves. Unlike in centralized exchanges, AMM doesn’t rely on buyers and sellers for a trade to take place. The dawn of decentralized exchanges (DEXs) and decentralized finance (DeFi) brought with it automated market-making (AMM).
Decentralised Finance (DeFi) series: tutorials, guides and more. Core Components of the DODO Contract Framework.
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