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DODO
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DODO
DODO is a Decentralized Exchange (DEX) and cryptocurrency that aims to be a Next Generation on-chain liquidity provider, leveraging the Proactive Market Maker Algorithm (PMM) to provide pure on-chain and contract-fillable liquidity for everyone. DODO is governed by the DODO governance
token.[1]
Overview
DODO accepts various liquidity providers’ assets. It gathers funds near Market prices to provide sufficient liquidity. In order to minimize different counterparty risks for Liquidity providers, DODO dynamically adjusts market prices to encourage arbitrageurs to step in and stabilize Liquidity providers' portfolios. [1]
PMM is designed to combine the best of AMM and centralized exchange’s order book for better liquidity and lower Slippage (finance). DODO launched on the 25th of August, 2020.[2]
History
Team
DODO was founded by Diane Dai, Mingda Lei, and Qi Wang who have influence in China's DeFi community. It launched publicly on August 25, 2020. Dai started the first DeFi Community in China, running a WeChat subscription channel called DeFi Labs, and numerous other WeChat groups such as “DeFi The World,” the oldest of China-focused DeFi WeChat groups.
Lei designed the PMM algorithm and was a Physics Ph.D. dropout at Peking University. He was one of the core developers of DDEX, another China-based DeFi project. Wang, is the founder of DOS network, China’s first oracle project.[3][4]
Investors
Framework Ventures led a $600,000 seed investment in DODO. Other notable investors include Robert Leshner, Bobby Ong, founder of CoinGecko; Jason Choi, and Spencer Noon.[2]
Around late September of 2020, DODO raised $5 million through the private sale of a new DODO exchange token. The valuation came out to $50 million. [4]
Services
Proactive Market Maker (PMM)
PMM leverages price oracles to retrieve accurate market prices of assets as input. It then aims to provide sufficient liquidity near the market price for every asset. The result is that liquidity decreases rapidly when far away from the market price. The following graphs compare the price curves of DODO (PMM) and Uniswap (AMM). [1]
With everything else fixed, the PMM curve is significantly flatter than the Automated Market Maker (AMM) curve near the market price, indicating higher fund utilization and lower slippage. [7]
As the market price changes, AMM passively relies on arbitrage trading to change prices. On the other hand, PMM proactively shifts the price curve in the same direction to ensure that the section in the vicinity of the market price remains flat. This ensures the constant provision of sufficient liquidity. [3]
High Fund Utilization
PMM, like AMMs, provides liquidity in the price range of zero to positive infinity, but the PMM price curve is significantly flattered in the area near the oracle (market) price. That is, most of the funds are gathered near the market price, which allows for more active, frequent trading, increasing fund utilization. [5][6]
Impermanent Loss
PMM slightly increases the price to make it more profitable for arbitrageurs to sell base tokens. In PMM, arbitrage trading makes sure that the number of tokens in the pool is always roughly equal to the number of tokens deposited by liquidity providers. This scheme effectively mitigates impermanent loss for liquidity providers, making liquidity provision on DODO a low-risk affair.
Chainlink integration
On its mainnet, DODO integrates with ChainLink for its price oracle, which provides price updates by aggregating responses from 21 independent price feeders (oracles). [1]
DODO Governance Token
DODO is a governance token created for governing the DODO ecosystem. The DODO ecosystem is run by three autonomous DAO's, including Admin DAO, Risk Control DAO, and Earn DAO. Admin DAO is the highest authority among the three, as it makes decisions on how other DAO's can operate.[2]
Risk Control DAO is building for the adjustment of risk parameters on the platform. Lastly, Earn DAO governs how earnings are distributed throughout the DODO ecosystem. The DODO governance token allows holders to vote on proposals related to the three DAOs. [1][2]
Token Allocation
DODO's total token supply is 1 billion. It is distributed in the following way:
- Core Team / Future Hires / Advisors - 15%
- Investors - 16%
- Initial Liquidity Provision - 1%
- Operations / Marketing / Partnerships - 8%
- Community Incentives - 60%
For the Core Team / Future Hires / Advisors branch, the tokens will be locked up for one year and will be 'linearly' released over the course of 2 years. Investors who participated in the seed round will be following the same schedule. Private sale round investors will have a six-month lockup, with a 10% immediate release. The remaining 90% will also be linearly released over the following year. The community incentives allocation will be distributed to supporters through a series named "DODO Carnival." [7]
The "Grey Parrot" episode of the Carnival series concluded at the end of September 2020. 3,122 wallet addresses participated in the liquidity mining event and received 18,915,000 DODO tokens, however, the team extended a bonus of 20% earning early miners 22,698,000 DODO. 1,283 wallet addresses received a total of 423,400 DODO tokens in trading rewards and 388 wallet addresses received a total of 388,000 DODO tokens in airdrops reserved for early adopters. The extra bonus tokens were locked and released linearly over a 6 month period. [4]
The second episode of the Carnival series is "Pica Pica", named after the intelligent Eurasian magpie. Pica Pica is will last six months, from block 10976000, which is roughly October 1st, 2020 to block 12158000, which is roughly April 4th, 2021. [3]
The NFT Market
By giving users a comprehensive set of tools and smart contracts for NFT creation, trading, and fragmentation, DODO enables users to instantly access the most cutting-edge NFT financial tools available.
The three primary purposes of the DODO NFT suite are :
- NFT distribution and generation, including ERC-721 and ERC-1155.
- The "buyout model" and "retail model" of NFT fragmentation both convert NFT value to ERC-20 assets.
- Maintenance of liquidity for NFT fragments using the original PMM method from DODO, starting at a cost of 0.
NFT fragmentation
NFT fragmentation is a method of supplying liquidity to NFTs. Due to the high pricing of many NFTs, the NFT market has been plagued by poor liquidity for a very long time.
An ERC-20 coin referred to as a "fragment" has a value based on a portion of the NFT. The platform can increase the liquidity of the market for an NFT and significantly increase the efficiency of NFT trade by converting the NFT into a set of fungible pieces.
Models of Fragmentation
These two models, which are appropriate in various situations, employ various ways to connect the NFT to the value of the fragment:
The buyout approach is advised by DODO for high-value NFTs with low turnover rates.
DODO advises the Retail model for low- to medium-value NFTs with high turnover rates.
DODO DEX Hack
On March 8, 2021, DODO decentralized exchange (DEX) lost $2 million after hackers exploited its crowd pools. DODO announced on Twitter that the exploit only targeted the following V2 Crowdpools: WSZO, WCRES, ETHA, and FUSI. The majority of DODO’s liquidity in V1 and V2 pools is safe. The hackers exploited only the pools created by users. [2]
DODO disabled the pool creation portal in the meantime to protect newly-created crowd pools and focused on recovering user’s funds with its security partner. The hackers stole $2.1 million: $900,000 in WCRES and $1.15 million in USDT. DODO later said in a statement that it expects under half of those funds ($1.88 million) to be returned. [6][6]
On March 9, the DODO team announced on Twitter, that the exchange recovered $1.89 million, comprised of about 1,140,000 USDT and 411 ETH, and plans to return the funds to affected parties. There were two seemingly independent agents in this attack.[6]
The first actor, who DODO calls "Individual A," essentially created counterfeit DODO tokens and exchanged them for real ones through the smart contract bug.
After the hack, Individual A contacted white-hat hacker Samszsun from Paradigm to help return the stolen funds to DODO. "Individual B," who performed three exploits on the smart contract 10 minutes after Individual A, is a suspected bot based on their actions, such as using Chi gas tokens, prefixing their contact address with numerous 0's, and setting unusually high gas prices. It is unclear whether Individual B will return funds to the decentralized exchange. [7]
Mining
At DODO, mining is an additional source of income. Currently, there are two types of mining.
- Mining a single coin pledge To take part in single coin pledge mining, users only need to charge tokens to the mining contract. There is no money lost when mining a single coin promise.
- LP Mining Market Making: In order to engage in mining, users must first deposit market-making money to the selected liquidity pool, then get LP tokens and fill out the mining contract. Keep in mind that LP market creating mining only supports public pools, and there is a possibility of principal loss.
Roadmap
Q4 2021
- Moonriver Deployment
- Aurora Deployment
- Privacy Transactions
- Build your own data index
- NFT Fragmentation
- Create NFT Tools
- Personal homepage
- New Home Page
- Create your own liquidity mining campaign
Q1 2022
Limit orders
- 0 gas trading mode
- Trading Agent
- Avalanche Deployment
- New token release mechanism for Crowdpooling
- New Documentation Center
Q2 2022
- Crowdfunding build pool V2
- UIUX fully upgraded
- PMM assisted calculation tool
- DODO tokenomics upgrade
- Independent NFT platform
Q3 2022
- Adaptive long tail coin market making
- New asset liquidity control tools
- Margin trading & perpetual contract incubation
Q4 2022
-
Ecosystem DAO
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REFERENCES
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