DeFi 101: What Is DODO DEX and Why Does It Have the Potential to Dominate the DEX Market?

2021/10/27 11:17:44

There has been an abundance of decentralized exchanges in the market; however, none have been able to dethrone Uniswap as one of the top decentralized exchanges. This doesn’t mean that Uniswap is perfect, it certainly has its own drawbacks, but there aren’t many decentralized exchanges that come close to Uniswap except for a few big players. If exchanges started being more original and started working on their own solutions, we could certainly see rapid evolution in the DEX space.

Interestingly, DODO DEX is one of the few exchanges that might take over the DEX space by solving some of the most fundamental problems. With its innovative and novel market maker algorithm, DODO DEX aims to eradicate impermanent loss, improve liquidity, and adapt to dynamic market conditions during events of rough price action.

In this article, we’ll be talking about the most hyped DODO decentralized exchange, how it works, and why you should be heading on over there right now.

Source: dodoex.io

What is DODO DEX?

DODO DEX is a DeFi protocol and a Decentralized exchange that works as a low-slippage on-chain liquidity provider based on Ethereum and Binance Smart Chain. Unlike every other Decentralized exchange that is powered by Automated Market Makers (AMM) algorithm, DODO is powered by a Proactive Market Marker (PMM) Algorithm that features highly capital-efficient liquidity pools and supports single-token provision.

What this does is that it basically eradicates impermanent loss, minimizes slippage for traders, and allows DODO to offer a smooth trading experience as well as profitable provision opportunities.

DODO is a part of the new generation of decentralized exchanges when it comes to providing on-chain liquidity. Moreover, DODO also supports emerging projects in the crypto space with its free ICO listing via its Initial DODO offering.

After launching in August 2020 by founders Diane Dai and Radar Bear, an enigmatic development team from China, DODO DEX has been improving trading experiences and setting an image for decentralized exchanges by significantly decreasing risks found in liquidity providers and guaranteeing more stable asset pricing.

With an ever growing list of unique services such as crowd pooling, IDO allocations, trader mining, NFT vaults, DODO vending machines, Private liquidity pool, and more, DODO DEX has been able to project over $25 million in daily trading volumes.

How Does DODO DEX Work?

What helps DODO DEX to stand out is its ability to offer decentralized on-chain asset trading with order execution that rivals centralized exchanges and trading platforms. Thanks to its shift from the initial AMM algorithm to the novel PMM algorithm, DODO DEX significantly improves capital efficiency, reduces impermanent loss, and drastically minimizes slippage for traders.

What’s impressive about the PMM is that it’s essentially an on-chain generalization of order book trading. By utilizing price feeds from Chainlink oracles, DODO’s PMM algorithm mitigates any massive variation in its price compared to the actual market price of assets.

The algorithm also factors the change in capital for each asset and adjusts the liquidity to guarantee lower risk. PMM’s proactive adjustment of its parameters allows for adjustable and flexible pools, which essentially stabilizes the portfolios of liquidity providers, lowers price slippages, and heavily negates impermanent loss.

DODO’s Core Products

While DODO DEX has basic trading, staking, and pooling features, it also has many other successful and intuitive products that can not be found elsewhere.

DODO Vending Machine

DODO vending machines allow anyone on DODO DEX to create a market using the exchange’s PMM mechanism and create a bonding curve for provisioned tokens. All users have to do is provide tokens, define the pricing curve, and the DODO vending machine will create a decentralized and non-custodial liquidity market for the asset.

DODO Private Pool

Similar to the DODO vending machine, DODO Private Pools enable users to create liquid markets; however, this product comes with a more advanced toolkit. DODO Private Pools enables market makers to make one-sided deposits and withdrawals, change the pricing curve at any time, and have liquidity for everyone in the price range from zero up to infinity.

DODO NFT Vault

DODO NFT Vault is an innovative and unique price discovery and liquidity protocol for NFTs. It allows users to create new and exciting NFTs, use NFTs, or deposit them into the DODO NFT Vault. Users could either keep their NFTs unique or fractionalize them so more users can access emerging NFTs.

DODO Token

DODO Token is an ERC-20 token that serves as the platform’s main utility and governance token. Its primary use is to incentivize liquidity provisioning on the platform and maintaining the platforms’ governance. Other use cases include gaining access to Crowdpooling and IDO allocation, Trading fee discounts, Dividend payments, and vDODO membership rewards.

Trading Mining

With the introduction of DODO DEX v2, traders can now mine DODO tokens by making traders on the DODO exchanges. All users have to do is participate in mining pools and receive 3 DODO for each block mined.

Closing Thoughts

There’s no doubt that DODO exchange is changing the DEX space with its suite of products, innovative market maker algorithm, and vision for the space. With an incredibly fast and easy interface, smooth trading experience, and unique services, we could soon see DODO exchange at the top of DEX lists any time soon.