The protocol used by Uniswap, one of the DEXs, relies on automated market makers to provide its services. Its actions result in a number of issues being unresolved.

More crypto-decentralized protocols are emerging as cryptocurrency usage increases in many mainstreams. Decentralized finance also has a variety of exchanges and protocols due to the distinctive nature of its operations.

The Proactive Market Maker (PMM) algorithm is the foundation of the decentralized exchange DODO, which aims to maximize capital efficiency. This highly regarded DEX has been gaining acceptance and popularity quickly and is anticipated to fully dominate in 2021.

By PMM, this new DEX shows to be a greater rival to Uniswap. Through real-time market pricing, the PMM offers sufficient liquidity for digital assets.

This DODO crypto review will give you all the details you need to know about this powerful DeFi technology. We’ll go over all there is to know about the exchange and the DODO token that it controls. We will also go over the features of the protocol and the benefits of a decentralized exchange.

What is DODO?

Through the use of a PMM algorithm, the DeFi protocol DODO offers on-chain liquidity at a fixed price.

Unlike automated market makers (AMM), the PMM algorithm offers a better liquidity pool at a stable price. This is because the PMM pricing mechanism emulates human pricing and works with oracles, which connect real-time data to blockchains.

The Ethereum network’s DODO protocol offers a permanent on-chain liquidity provider solution. Centralized exchanges (CEXs) are comparable to and similar to the DEX contract-fillable liquidity. Additionally, the DEX’s price stability is based on the current market prices for the assets.

Through PMM, DODO exchange provides a better remedy for some shortcomings when compared to AMM functions. To provide sufficient liquidity for the maintenance of the liquidity providers’ portfolios, the DEX uses real market prices for assets. Additionally, DODO eliminates impermanent loss and minimizes price slippage through the benefits of arbitrage trading.

Trading cryptocurrency on the DODO exchange is incredibly efficient in terms of transaction execution, with rich liquidity and minimal slippage. In terms of deal execution, DODO cryptocurrency trading appears to be comparable to trading on high-performance centralized exchanges like FTX and Binance.

The PMM algorithm’s approach, in contrast to AMM functions, imitates more “human” pricing and uses oracles to link real-time data with the blockchain. We will go into more detail about the inner workings of the protocol in a later part.

Mingda Lei, Diane Dai, and Qi Wang, three blockchain industry experts, founded the DODO exchange in August 2020.

It makes sense that the DODO platform has some outstanding partners and supporters. After observing the enormous impact that decentralized exchanges like Uniswap and SushiSwap had on the market, when DODO announced that it was a next-generation DEX and claimed to be similar to but better than those exchanges, people’s attention was caught. Companies like Pantera, Binance, Coinbase, Alameda, and others expressed interest.

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How does it work?

The DODO PMM algorithm minimizes transaction costs while reducing price slippage. On the platform, order execution resembles that of centralized exchanges. Similar to other DEXs, arbitrageurs and liquidity providers continue to rule the DODO ecosystem. However, the method eliminates all potential causes of transient loss.

The AMM capability present in other DEXs is replaced by DODO’s special PMM. The PMM algorithm is used to help the liquidity market’s price curve flatten.

The PMM creates enough liquidity by combining funds at market rates.

The new equation of the DODO PMM algorithm, where R is the risk factor and P is the market price of DODO, is useful for indicating the market price of a digital asset.

The platform price and the market price are directly linked in the protocol thanks to the established algorithm. The protocol adjusts itself automatically as the market price declines. This helps the DEX draw arbitrage to ensure the stability of the portfolios of the liquidity providers.

The following may be ensured by DODO’s PPM algorithm:

• affordable cost.
• Price escalation has decreased.
• financial usage has increased.
• exposure to just one threat.
• There is no longer a permanent loss.

In August 2020, DODO will begin utilizing pricing feeds from Chainlink’s oracles as part of its partnership. The algorithm can avoid significant price discrepancies between itself and the assets in the actual market because of the real-time market pricing.

Keep in mind that risk increases along with increased liquidity. As a result, the R factor will inevitably decrease as a liquidity pool is built.

There might be a problem with such relational trust because the DODO exchange pricing is based on Chainlink price data.

This implies that inaccurate information will be transmitted to the DODO platform in the event of a potential failure or breach in Chainkink’s nodes. Because of this, market pricing based on false information may cause significant losses for liquidity providers in the DODO ecosystem.

By quickly reducing liquidity away from the market price using this methodology, arbitrage opportunities are removed, creating a more effective exchange system.

The PMM architecture of the DODO cryptocurrency exchange encourages arbitrage trading, ensuring that the exchange price and market price are in sync. Although this objective is not unique, the PMM stands out because it modifies the price curve to achieve an effective liquidity structure.

Since DODO has been available since the middle of 2020, we have a strong body of evidence showing that this model is superior to the previous AMM strategy. The PMM model has demonstrated that it helps liquidity providers and provides sufficient liquidity for an infinite number of trading pairs.

In conclusion, the PMM strategy lowers the risk of momentary loss, luring liquidity providers to the platform. The idea also takes advantage of known drawbacks in traditional order-book-based and AMM exchanges, such as their reliance on human input, high operating costs, or inability to provide the necessary liquidity to function.

In the interest of full disclosure, the PMM model has flaws, but they are both less numerous and serious than the AMM model’s flaws. Because DODO relies heavily on Chainlink oracles for pricing and the PMM architecture is inappropriate for arbitrage traders, the DODO platform is susceptible to single point of failure risk in the event that the oracle malfunctions.

Features

Exchange

Order execution through DODO’s decentralized on-chain asset trading is on par with that of centralized exchanges. The exchange feature is the exchange feature of DODO.

On the same network, DODO enables the trading of two different tokens at random. By automatically selecting the appropriate order routing from a pooled liquidity source, this function gives traders the best pricing. Additionally, users who make deals can profit from trade mining to obtain DODO tokens.

It is easy to use the Swap function on DODO; as previously stated, slippage is always advantageous, and sufficient liquidity is not a concern for the average trader.

It is easy to use the Swap function on DODO; as previously stated, slippage is always advantageous, and sufficient liquidity is not a concern for the average trader.

Vending Machine

The DODO vending machine enables anyone with a wallet to create a liquidity market thanks to DODO’s PMM technology. For the asset that the user has chosen, the DODO Vending Machine will offer a decentralized, non-custodial, and open liquidity market.

This feature is extremely special and completely permissionless, allowing anyone with a wallet to set up trading venues without worrying about the platform’s censorship or interference. This makes token distribution and market-making equitable and accessible to everyone.

This functionality is very helpful for blockchain developers or project teams that want to launch a token but lack the resources to provide the liquidity needed to do so on a traditional AMM but still want to bring a product to market.

Crowdpooling

With the help of the equal-opportunity token launch platform known as crowdpooling, customers can directly access projects in the most equitable way possible.

By launching liquidity markets and allocating tokens equally, projects can avoid being vulnerable to bot interference and frontrunning from early investors and people with insider information.

The platform provides two types of crowdsourcing, namely:

Fixed-Price CP: With this type of crowdsourcing, token assets will be auctioned off at a set price.
Variable-Price CP: In this type of crowdsourcing, the cost of a token asset is determined by a predetermined pricing curve. The price will increase as more tokens are made available. Tokens will be distributed to each player at the start in proportion to their pool shares.
A free listing can be used by new businesses to raise capital thanks to DODO’s Initial Offering feature, allowing them to launch liquid marketplaces with the added security provided by the liquidity protection period.

Private Pool

Similar to the vending machine, this tool offers options for sophisticated investors. Additionally, Private Pool offers more enjoyment for seasoned market makers who require something more than the Vending Machine.

The following benefits of Private Pool are available to users:

It is possible to alter the price curve indefinitely.
Withdrawals and deposits are only one method.
With a price range of 0 to infinity, there is constant liquidity availability.
discovering the current price.
market with consistent prices.
avoidance of risky situations.
The standard AMM model has been turned around.
With the help of the setting options, Private Pool helps users develop their own markets. You have a lot of options for designing your trade patterns using the provided parameters. Users of the protocol can create and manage their own on-chain liquidity pools.

Pegged Pool

In this pool, anyone may offer liquidity suitable for synthetic assets, but once the pool has been established, its properties cannot be altered.

Mining

Liquidity Mining

Liquidity mining, also referred to as decentralized market making, is a feature of the DODO platform. It all revolves around using cryptocurrencies to supply DEXs with liquidity. Liquidity mining for DODO has no lock-up period and is redeemable at any time. Additionally, rewards are accrued each block.

Combiner Harvest Mining

The potential and trending initiatives that are eager to engage with the platform are exposed to users of this mining DODO platform. Liquidity providers in vetted projects’ liquidity pools will also receive DODO incentive tokens.

NFT Vault

A unique cryptocurrency pricing invention and liquidity project is called the DODO NFT Vault. New or used NFTs can be used to make donations in the NFT Vault. Additionally, it is possible to fractionalize or keep the NFTs as singular entities. The NFTs are split into multiple bits if the latter option is chosen. Since they are fungible, they can be used as tokens.

The NFT must establish a similar liquidity pool in order to use the Vault. The market flexibility and efficiency required for trading NFTs bits will be established as a result. The entire system is run by the protocol’s PMM algorithm.

Bridge

There are four such bridges on the DODO platform: Arbitrum bridge, BSC bridge, cBridge, and Polygon bridge.

Fees

Trading fees

A unique cryptocurrency pricing invention and liquidity project is called the DODO NFT Vault. New or used NFTs can be used to make donations in the NFT Vault. Additionally, it is possible to fractionalize or keep the NFTs as singular entities. The NFTs are split into multiple bits if the latter option is chosen. Since they are fungible, they can be used as tokens.

The NFT must establish a similar liquidity pool in order to use the Vault. The market flexibility and efficiency required for trading NFTs bits will be established as a result. The entire system is run by the protocol’s PMM algorithm.

Withdrawal fees

Besides network fees, the exchange, like other decentralized exchanges, does not charge for transfers or withdrawals. The relevant cryptocurrency’s/blockchain’sminersreceive the network fees, not the exchange. Depending on the level of network congestion, network prices change daily.

In terms of charge levels for crypto withdrawals, having to pay only network fees should be regarded as being lower than the global industry average.

Security

Every person who makes use of or plans to use a platform is worried about its security. Because of this, numerous security audits have been carried out by numerous companies, including SlowMist, PechShield, Certik, Beosin, and TrailofBits. These are a few well-known blockchain security firms that keep the platform safer, along with all smart contracts, Crowdpooling contracts, and audited DODO Vending Machine.

Because this is a decentralized network, it is up to the user to use the platform responsibly, not the platform. While DeFi benefits from all the security that comes with self-custody, DODO is nonetheless secured by the underlying blockchain protocols it uses.