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DODO Decentralized Exchange is a Decentralized Financial Protocol (Defi). The exchange is built as a liquidity provider on the Ethereum platform and the Binance Intelligent Network (BSC). It is also supported using an innovative marketing algorithm called Proactive Market Maker (PMM). Follow us to get more acquainted with Dodo Exchange and its facilities.

Dodo’s new market maker

In general, decentralized exchanges are managed in two ways; Order book and automated market maker (AMM). In decentralized exchanges, smart contracts are used to prevent the business from accessing users’ information and disclosing their identity information. Overbook-based DEX exchanges typically operate off-chain; Because decentralized over-the-counter exchanges are unusable due to the need for in-chain resources.

On the other hand, overbook is faster than out of the chain; Because they use intermediaries known as relayers to manage to overbook chains. But the biggest challenge for these exchanges is providing liquidity.

An automated market maker can be used to solve this problem. In this way, users are encouraged to invest and buy tokens, and as a result, the necessary liquidity is provided. But decentralized exchanges based on automated marketers are not without problems; The main challenge of these exchanges is impermanent loss.

Dodo Exchange uses the Proactive Market Maker (PMM) algorithm to solve the volatile loss problem of automated decentralized exchanges (DEX) based on computerized marketers such as Uniswap or SushiSwap. Using this new market maker, this exchange offers better liquidity and price stability than automated market makers (AMM).

What is DODO Exchange?

DODO is a Defi protocol and slippage provider of liquidity built based on the Ethereum Network and the Binance Intelligent Network (BSC). With a new algorithm called PMM and single asset liquidity, Dodo Exchange has provided integrated trading conditions with profitable liquidity opportunities for users.

DODO Exchange was founded by two Chinese developers, Diane Dai and Radar Bear, and an anonymous development team. Launched in August 2020, the protocol was audited by PeckShield and Trail of Bits and operated using ERC-20 DODO tokens.

Dodo Exchange has liquidity tanks that minimize the possibility of unstable losses and slippage for traders. The protocol also includes new digital currency projects with accessible ICOs through its Initial DODO Offering (IDO), known on the exchange’s website as Crowdpooling.

The exchange uses DODO SmartTrade and PMM algorithms to reduce costs and provide the best user experience.

What are the features of DODO Decentralized Exchange?

DODO V2 product portfolio includes SmartTrade, Crowdpooling / IDO trading and aggregation services, pools, and mining, providing liquidity, trading, and combined mining. The platform supports a wide range of wallets, including MetaMask, Coinbase, WalletConnect, and Portis.

In addition, Dodo Exchange supports unique features, including DODO Vending Machine, DODO NFT Vault, and DODO Private Pools.

Proactive Market Maker

The Proactive Market Maker (PMM) algorithm was developed entirely by the DODO team, focusing on the design of automated market makers (AMMs) to improve capital productivity, reduce volatile losses, and minimize slippage for traders. In short, PMM is a very accurate generalized version of the in-chain overbooks. The PMM pricing mechanism uses oracles to collect asset prices accurately. AMM-based DEXs, on the other hand, use a simple fixed curve to determine the current price based on the present value of each asset.

PMM uses parameters such as asset ratio and curves slope to predict market conditions, resulting in DODO pools that are adaptable and flexible for various applications. This approach enables the protocol to provide sufficient liquidity close to the market price to stabilize the liquidity supply portfolio (LP), price reductions, and volatile losses through arbitrage as a reward.

Smart trading in DODO exchange

SmartTrade is a decentralized liquidity aggregation service that looks at different sources of liquidity and compares them to determine the optimal exchange rate between the two tokens. This innovative feature finds the best order from aggregate liquidity sources to offer the best price to traders.

In Dodo Exchange for similar tokens, there are several sets of liquidity with different curves and price parameters configured and designed by users to meet their market-making needs. SmartTrade connects these pools and finds the best price among them. It should be noted that the DODO exchange also integrates other Defi protocols to collect liquidity, including 0x and 1inch.

DODO pools

Liquidity pools make decentralized trading of assets possible in the first place. DODO pools provide the conditions for liquidity suppliers to implement their strategies to create marketers within their chain entirely unlicensed and non-reductive.

The most crucial advantage of Dodo exchange pools is that liquidity providers do not have to transfer pairs of tokens to the collections and can deposit any amount of base tokens or equivalent.

In general, DODO exchange pools can be divided into three categories:

DODO public pools

Public pools, also known as DODO Vending Machines (DVMs) in the protocol, allow anyone with a wallet to create a liquidity market using PMM DODO technology to create a bond curve for the tokens provided. Pool builders only need to give tokens and set the desired price curve for the DODO Vending Machine to create a liquidity market for the asset.

As the name implies, anyone can provide liquidity to these pools and divide the transaction fees by the percentage of their shares. It should be noted that in public dodo pools, the collection parameters are not changeable after creation.

DODO private pools

These pools, also called DPPs, are for professional marketers with unique features that DODO Vending Machine is not enough for! In this model, pool builders can create pools that require only one token. As the name implies, liquidity is the sole responsibility of the pool builder, and unlike public collections, the pool builder can change the pricing curve at any time.

Pegged Dodo Pools

According to DODO, these pools are suitable for combined assets. Like public pools, anyone can provide liquidity and, once the number of tokens has been determined, the transaction cost rate, the initial price, and the slip coefficient cannot be changed.

Crowdpooling in Exchange

DODO exchange using Crowdpooling makes it possible to issue new assets at the lowest cost. And create very high liquidity capital. In fact, in Dodo Exchange, anyone can create their token without any coding and distribute it through crowd pooling.

According to the documents of this exchange, Crowdpooling is:

It is an equal opportunity to distribute tokens and start liquidity markets. Crowdpooling, inspired by the call auction mechanism in securities markets, ensures that there are no pre-determined robotic interventions.

Currently, DODO V2 only supports two Crowdpooling models called Fixed-Price CP and Variable-Price CP.

Extraction in exchange

Users of the DODO platform can receive DODO tokens by participating in liquidity extraction, trading pool, and Combiner Harvest extraction, which are reserved for liquidity suppliers, traders, and pool builders, respectively.

Traders can extract the DODO token and receive it for free using digital currency exchange trading services. Pool liquidity providers receive DODO LP tokens and are rewarded by cashing in LP tokens.

In addition to traditional mining, trading, and liquidity, pool builders and liquidity suppliers can also participate in Combiner Harvest mining. Documents released by the exchange describe this feature as follows:

A program that aims to expose users to future projects that are willing to collaborate with DODO. According to the rules of this system, approved projects can create liquidity tanks in DODO, and those who provide liquidity to these pools will be awarded DODO tokens.

token

The total supply of DODO tokens will be one billion. And 60% of that will be divided into community incentives called “DODO Carnival” following services. Gray Parrot is the first running offering that handles all liquidity and airships. The following 15% of the tokens will be locked for one year and given linearly to potential recruits, key staff, and consultants over the next two years.

In addition, 8% is used for operations and marketing, 16% for customers, and the remaining 1% for initial liquidity. So at the time of writing, the volume of tokens circulating Dodo is 12 million.

Concluding remarks

Although the protocols used in Dodo Exchange are still in the preliminary stages, the results seem to be good and solve many challenges. If you are a DODO exchange user, you can get voting rights by buying Dodo tokens. And participating in Crowdpooling and getting a discount for trading.