DODO DeFi Token: Everything You Need to Know
Annie Li Apr 24, 2021 16:00
DODO is a decentralized exchange based on Ethereum and Binance Smart Chain by using Proactive Market Maker to provide users with a single token market-making to earn transaction fees.
DODO is a decentralized exchange operating on the Ethereum blockchain that utilizes the algorithm of the Proactive Market Maker (PMM) to provide users with tokens to earn transaction fees.
According to DeFi Pulse data, DODO's native token DODO is now ranked 37th with a $59.1 million total value locked in the decentralized finance (DeFi) market. It has only been listed for two months and is a relatively new project in the crypto space.
Some of the decentralized exchanges we are familiar with, such as Uniswap, use algorithms such as automatic market maker (AMM), allowing investors to deposit funds into the on-chain liquidity pool in advance, in a completely decentralized and non-custodial manner, all the while providing seamless transactions between cryptocurrencies.
However, traditional AMM possesses the pain points of impermanent loss, low capital efficiency, insufficient liquidity utilization, and multi-token risk exposure.
In order to solve the above problems, DODO created the Proactive Market Maker (PMM) algorithm, which aims to generalize the order book matching system.
High capital utilization
PMM adjusts the pricing curve by using a price prediction system so that a larger part of the liquidity is concentrated around the market price of assets. This enables more active and frequent transactions, thereby improving capital efficiency and reducing impermanent losses. As shown below, near the market price, the DODO curve is flatter than the Uniswap curve, indicating higher capital utilization and lower slippage.
Unilateral transaction
At the same time, PMM allows market makers to deposit solely unilateral assets of a certain trading pair, so traders do not need to bear bilateral risks.
Low transaction costs
The DODO mainnet integrates the Chainlink oracle, which provides price updates by aggregating responses from twenty-one different price feeds, and reasonably allocating less costly transaction fees to liquidity providers.
DODO has gained the approval of many top global investment institutions including Three Arrows Capital, Binance Labs, Coinbase Capital, and Alameda Research, to name a few. Dodo is currently listed on the Binance and FTX exchange.
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