Key Takeaways
DODO is set to become a key DEX on DODOchain in 2024, enhancing its capability to support seamless omni-chain trading of assets like Bitcoin and Ethereum tokens.
DODOchain powers the omni-trading experience with its core components: DODO Core Trading Engine, Trusted Bridges, and advanced Layer3 architecture.
DODO's strategic positioning with DODOchain will expand its market reach, boost transaction volumes and revenue, and unlock new opportunities by enabling deeper interactions with more protocols and funds.
Introduction
DODO is a decentralized exchange that facilitates omni-trading across various blockchain networks. It uniquely supports Ethereum rollups and Bitcoin Layer 2s, allowing users to seamlessly trade Bitcoin and Ethereum tokens, yields, and points all in one integrated platform, while also benefiting from restaking incentives offered by ecosystem partners.
With the launch of DODOchain in 2024, DODO is poised to transform into a core exchange on DODOchain, powered by advanced technologies like Arbitrum, EigenLayer, and AltLayer. This strategic development promises to enrich the trading experience, offering additional incentives and strengthening DODO’s role in the decentralized finance landscape.
DODO’s History
Launched with a vision to revolutionize the DeFi space, DODO debuted its platform with the unique Proactive Market Maker (PMM) algorithm that centered liquidity around oracle prices to significantly uplift capital efficiency and improve exchange rates for mainstream assets. DODO has since continuously evolved, adding robust features such as the Swap Aggregator DODOX, Limit Orders, Crosschain Swap Aggregator, Launchpad, Token Creator, and Trading Widgets.
With deployments across 14 mainnets, DODO has facilitated over $141 billion in total trading volume through more than 24 million transactions, engaging over 3.31 million users globally. The April 2024 introduction of DODOchain signifies a major leap towards becoming an Omni Trading DEX, further enabling the platform to unify liquidity from diverse chains and support direct asset trading across the Ethereum and Bitcoin ecosystems.
Key Features
At the core of DODO’s innovation is the PMM algorithm, which is designed to provide highly capital-efficient liquidity pools. This system supports single-token liquidity provision, which substantially mitigates impermanent loss and reduces slippage during trades.
Key to the PMM's effectiveness is the 'k' parameter, which controls how sensitive prices are to changes in asset availability. A higher 'k' value means prices react more sharply, leading to steeper price changes, while a lower 'k' value smooths out price fluctuations.
Through its versions, DODO has continuously enhanced its offerings. DODO V1 established robust and reliable liquidity, which is especially beneficial for stablecoin trading. DODO V2 opened up the system, allowing anyone to set up their own liquidity pools tailored to specific needs, ranging from general trading to specialized pools like the DODO Vending Machine for unique assets, the DODO Private Pool for mainstream tokens, and the DODO Stable Pool for stablecoins. Launched in 2023, DODO V3 is tailored for professionals, refining strategies and revenue sharing among Liquidity Providers and Strategy Providers and introducing safeguarding measures like collateralization.
DODO also incorporates DODO X, an advanced routing algorithm that extends DODO’s reach by connecting with almost all available on-chain liquidity sources—not only from DODO’s own pools but also from major platforms like Uniswap. This setup, combined with data from aggregators such as 1inch and 0xAPI, ensures that traders on DODO receive the best prices and a broad spectrum of trading options, reinforcing its leading edge in the decentralized finance arena.
How Does It Work?
DODO powers the DODOchain omni-trading hub, enabling smooth and efficient trading across different blockchain networks, even those that aren't EVM-compatible. The system is built on three main components: the DODO Core Trading Engine, Trusted Bridges, and Layer3 architecture.
DODO Core Trading Engine
Central to the DODOchain’s functionality, the DODO Core Trading Engine uses sophisticated market-making algorithms to ensure liquidity and optimal pricing across any blockchain. It dynamically adjusts prices based on the current supply and demand of assets, providing consistently good trading conditions.
Trusted Bridges
Functioning as critical conduits for transactions, Trusted Bridges optimize cross-chain trade paths by selecting the safest and most efficient bridges available. These bridges reduce the complexity and costs typically associated with cross-chain transactions, making them more accessible and secure for users.
Layer3 Architecture
Enhanced by cutting-edge technology like Arbitrum Orbit, the Layer3 architecture facilitates efficient order execution and liquidity integration, ensuring transactions are processed swiftly. The addition of EigenLayer within this architecture strengthens security, safeguarding the integrity and safety of cross-chain trading activities.
Trading Process
The process starts when a user picks an asset and the amount they want to trade. The DODO Core Trading Engine calculates the best trading route and price quickly.
A Bridge Aggregator then picks the most suitable cross-chain bridge based on current conditions and security.
Once chosen, the transaction is sent through this bridge. The secure design of DODOchain, enhanced by EigenDA and the AVS validator network, ensures the safety of the user’s assets throughout the transaction.
After crossing to the target chain, the transaction is swiftly finalized thanks to the efficient Layer3 setup.
Users can then access their assets immediately, completing the transaction seamlessly.
DODO Tokenomics
DODO Token on DODO DEX
The DODO token is meticulously designed to drive growth and capture value within DODO DEX. Functioning primarily as a governance token, DODO enables holders to vote on various proposals and enjoy benefits in Initial DEX Offerings (IDOs) and Crowdpooling events. It also offers additional benefits such as a share of transaction fees and exclusive rewards. The token circulates on several major chains, including Ethereum, BNB, and Arbitrum, facilitating a broad reach across the decentralized finance ecosystem.
DODO's Role in DODOchain
With the launch of DODOchain, the utility of the DODO token has greatly expanded, particularly in the area of staking. Token holders can now engage more directly with the platform and benefit from its growth by using DODO for staking, which yields fundamental staking rewards.
DIP Updates: 200M DODO Migration
In a strategic effort to boost Total Value Locked (TVL) and user growth, and to attract future partners, a proposal has been put forward to migrate 200 million DODO tokens to DODOchain. This move is aimed at better resource allocation and platform growth. Additionally, future revenues from DODO DEX will not go towards buybacks and distributions but will be directed to the DODO community treasury. This arrangement will continue until new tokenomics are introduced, at which point token management and utilization will be reassessed through a governance and voting process by the token holders. This shift in economic strategy is designed to strengthen DODO's financial base and align its operations with community interests, ensuring ongoing growth and innovation in decentralized trading.
Empowerment of DODO by DODOchain
The core mission of DODO has been to enhance liquidity and trading efficiency across the blockchain ecosystem consistently. The launch of DODOchain marks a significant milestone in achieving this goal, as it positions DODO to evolve into an Omni Trading DEX. This advancement enables DODO to seamlessly integrate with the Layer 2 networks of Bitcoin and Ethereum, thereby creating a unified platform that consolidates liquidity from various chains and facilitates direct trading of a wide range of assets across these ecosystems.
As the landscape of Bitcoin Layer 2 solutions expands, including BTC tokens like lBTC, fBTC, and tBTC, the demand for a cohesive trading platform becomes increasingly crucial. Currently, Bitcoin yield-bearing tokens do not have a centralized trading venue akin to Ethereum’s Layer 2 tokens, resulting in a market that is inherently cross-chain and fragmented. DODOchain aims to solve this by establishing itself as a central hub for trading not only Ethereum and Bitcoin tokens but also their associated yields and points, thus broadening market access and enhancing the trading experience.
Future Outlook
This strategic positioning of DODOchain will enable DODO to access a larger market capitalization, increase transaction volume and revenue, and foster deeper interactions with more protocols and funds. It will also open up new opportunities by unlocking additional use cases within the DODOchain environment.
Looking ahead, DODOchain's integration is expected to propel DODO into new heights of market relevance and leadership in the decentralized finance space. The focus on building a robust, integrated trading platform will not only meet current market demands but also anticipate future trends and innovations, ensuring DODO remains at the forefront of the DeFi industry. This forward-thinking approach is poised to sustain DODO’s growth and enhance its value proposition in the ever-evolving blockchain ecosystem.