DODO is a decentralized exchange that works in the Ethereum blockchain and uses the algorithm of Proactive Market Maker (PMM) to provide users with tokens that they can use to earn transaction fees.
According to DeFi Pulse data, DODO’s native token DODO now ranks 37th with a total value of $ 59.1 million decentralized financing (DeFi) market. It’s only been listed for two months and is a relatively new project in the crypto space.
Some of the decentralized exchanges known to us, such as Uniswap, use algorithms such as the Automatic Market Maker (AMM) that allow investors to deposit funds into the on-chain liquidity pool in advance in a fully decentralized manner and without a custodian. At the same time, seamless transactions between cryptocurrencies are provided.
However, traditional AMM has the weaknesses of inconsistent loss, poor capital efficiency, insufficient liquidity utilization, and risk with multiple tokens.
To solve the above problems, DODO created this Proactive market maker (PMM) algorithm that aims to generalize the order book matching system.
High capital utilization
PMM adjusts the price curve using a price prediction system so that more of the liquidity is focused on the market price of assets. This enables more active and frequent transactions, thereby improving capital efficiency and reducing volatile losses. As shown below, the DODO curve is flatter than the Uniswap curve near the market price, indicating higher capital utilization and less slippage.
At the same time, MarketM enables market makers to deposit only unilateral assets of a specific trading pair, so that traders do not have to bear any 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 assigning liquidity providers reasonably lower transaction fees.
DODO has received approval from many of the world’s leading 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 exchanges.
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