Crypto is a mark of innovation, a move away from the stasis decay. Funny enough, before the concept of blockchain and the demonstration of Bitcoin, the traditional finance system had been using the same rails with minor upgrades for over 30 years.
With crypto and Bitcoin came smart contracting and now decentralized finance, simply DeFi. The asset class can be traced back to the emergence of dApps in 2017, with only a few projects ambitious to cause a paradigm in finance. Fast-forward three years later, and DeFi protocols lock a whopping $27 billion in Ethereum alone.
What is DODOEx?
Of this, there is DODOEx, a token swapping protocol with an innovative order matching algorithm. Most people think of DEXes and Uniswap, DyDx, and others come to mind. However, DeFi and swapping dApps are diverse and have various mechanisms to address identified loopholes.
But what exactly makes DODOEx different? After all, it is a trustless swapping protocol running in Ethereum. Why not use Uniswap instead?
This lies in their main objective and their ways of ensuring liquidity providers have a fair deal.
DODOEx is an on-chain liquidity provider on Ethereum that uses the Proactive Market Maker algorithm (PMM) for on-chain, fast contract-fillable liquidity for everyone.
PMM leverages price oracles for accurate market prices as input and aims to provide enough liquidity near the market price of any listed asset ensuring the constant provision of liquidity.
The community will eventually control this protocol via three DAOs:
- The Admin DAO is the absolute mediator of all issues.
- The Risk Control DAO supervises and deals with all risk-related events.
- The Earn DAO to distribute revenue to the maintainer.
The Admin and Risk DAOs both have A-level authority. That is, they can freeze transactions. However, all actions of the Admin DAO must go through a complex governance process.
From this, three things emerge:
- DODOEx is on-chain (like Uniswap) and community-owned.
- It uses a new order matching and filling mechanism different from mainstream LP called PMM.
- Their contract-fillable liquidity translates to fast and more efficient price discovery comparable to centralized exchanges.
Because the DEX exists on-chain, it also means smart contracts can leverage DODOEx’s liquidity to complete actions such as auctions and liquidation.
Extrapolated, it also means DODOEx accepts LP’s assets, often near market prices, to provide sufficient liquidity while incorporating oracles. The aim? To reduce counterparty risks for LPs by dynamically adjusting market prices to encourage arbitrageurs to step in (and profit), stabilizing LP portfolios.
Subsequently, there emerge several benefits for swappers (users). One is that there is low slippage. Second, there is single asset exposure without minimum thresholds—yes, no pair tokens. Third, there is minimum impermanent loss—that is, losses due to opportunity cost.
With the attraction of low IL and single-asset exposure complete with incentivization for liquidity providers, Liquidity Providers (LPs) can create trading pairs with their tokens without paying listing fees, as would have been the case in CEXes.
Additionally, they can obtain additional liquidity by depositing their tokens without taking on price risks.
Furthermore, from the DEX, projects can crowd-fund through the Initial DODO Offering (IDO) the platform creators describe as a new approach to token issuance.
As mentioned earlier, crowd-funding via IDO is free.
Projects seeking to raise funds have to set the oracle’s price to a constant—that is, the initial offering price, and begin their crowd-funding.
Single-Asset Exposure and Impermanent Loss Mitigation
All they need is their token (an ERC-20 compliant asset is sufficient). Because DODOEx’s PMM eliminates the need for a quote token, all the project needs to do is launch a pool and deposit their token therein.
The PMM creates the ask side with its depth based on the number of tokens deposited. Buying activity causes the price to rise as the quote token flows into the pool. It is this the influx of quote token inflow that builds the bid side depth.
This benefits the issuing project in several ways:
- The initial offering price is set without capital requirements.
- There is sufficient and contract-fillable liquidity.
- Parameters can be filled as per the issuer’s requirement.
However, basing on the above developments and exciting architecture, it is natural for people to inquire how the protocol balance’s its pool.
This is easy.
Take, for example, the ETH/USDC pool in DODOEx.
The pool is open for everyone, and tokens can be swapped.
DODOEx charges a 0.3 percent ETH as transaction fees for buyers of ETH and 0.3 percent as transaction fees for USDC sellers in USDC with a dynamic adjustment through better incentives (ROI) and arbitrageurs to balance out temporary discrepancies.
Accordingly, this adjustment ensures maximum liquidity near the market price, translating to low slippage. This explains why DODOEx’s trading volumes are consistently above $5 million.
DODOEx Tokenomics and Distribution
DODO is an ERC-20 governance token for the DODO decentralized exchange.
There are 1 billion DODO tokens as total supply distributed as follows:
- 600 million for community incentives
- 80 million reserved by DODOEx Foundation for marketing and other operations
- 10 million for IDO—circulated immediately after crowd-funding
- 150 million for the team and advisors
- 100 million for private round investors
- 60 million for seed round investors
The token began trading on Oct 1 with an opening price of $0.53, sinking to $0.15 on Dec 23 before rallying to $1.8 on Feb 1.
From listing to early Feb 2021, the ROI in USD terms is 3.3X.
The token is currently trading at $1.78 with a $59.1 million market cap, with slightly more than 33 million DODO tokens in circulation.
Besides DODOEx, the token is available for trading at:
- Uniswap V2
- MXC Exchange
There are 11 DODO markets, but pairs at the above exchanges have better liquidity.
- DODO is up 3.3X in four months, with ballooning liquidity suggesting interest from investors and more utility.
- The platform is already one of the largest DEXes in DeFi by monthly trading volumes.
- Trackers are beginning to take note. Coingecko already provides analytics tools pointing to interest from users and the investment community.
- The DEX is easy to use with an attractive user interface. Together with their offerings—including Gas rebates, it explains the high Twitter following of over 10k.
- DODO also has a wallet integration with WalletConnect and Portis for easy-of-use.
- DODO has been listed by one of South Korea’s largest cryptocurrency exchanges—Coinone.
- Already—outside of Uniswap V2, the token is available for trading at several CEXes, including MXC and Gate.io.
- The Project is a working solution; solving the impermanent loss project that analysts say is mainly due to the inefficient AMM project. DODOEx’s PMM means providing liquidity without risks of loss due to impermanent loss (IL).
- The DEX already manages over $27 million in TVL but with better capital efficiency and single-asset exposure.
- Liquidity Mining will go live in early February 2021.
- More pairs are being added, with the latest being SNX and more.
- Through the sophisticated PMM, swappers can exchange tokens with low slippage and comparatively lower Gas fees—ETH is in a bull market and explains the abnormally high Gas fees.
- With backing from Binance Labs, Alameda, Coinbase Ventures, Three Arrows Capital, and Pantera Capital (a serial crypto investor), sooner or later, there will be even liquidity for DODO once listed on Binance and Coinbase.
- With a resolution of IL, institutions can enter the DeFi market knowing that their funds are secure.
- From its IDO, where projects can issue tokens for free, CrescoFIN—a Swiss regulated equity token launched and currently sits with over $11 million on the DODO platform.
- ShuttleOne is also listing on DODOEx.
- DODOEx version 1.5 was released in December 2020. It introduced Smart Trade—which has custom routing algorithms, integrating with 0x and 1inch APIs. Others include improvements in price charts, activation of pending transaction tracking, and more advanced trading settings.
- Peckshield and Trail of Bits audited DODOEx smart contracts. Besides, they run a bounty program for white hackers.
- The DEX continues to develop and will soon launch V2 with better features, including a super aggregator for other DEXes, crowd pooling (without bots meaning fair launches), enabling minimal capital requirements, and customized market making. V2 also supports an infinite number of liquidity pools. Private V2 invites to go out soon; contracts are out.
- WSB, the Reddit group behind the GME pump, is already crowd pooling via DODOEx.
- Already DODO Staking is live.
- DODOEx also launched the Vending Machine easing token distribution and market-making, a useful platform for community-driven projects.
- The exchange has partnered with Chainlink, the world’s leading decentralized oracle provider, translating to security and confidence. DODOEx also partnered with Wootrade—a network dedicated to providing diversified liquidity and trading infrastructure.
- DODO has been integrated by Zapper.fi on their exchange portal because it has one of the best rates in the sphere.