THIS STRATEGY IS BRAND NEW. DODOEX HAS BEEN AUDITED BUT IS NOT RISK-FREE. TRADERS SHOULD APPROACH THIS STRATEGY KNOWING YOU MAY LOSE FUNDS.
This is part of the Alpha Tractor series - giving you intel into the freshest yield for the most honest farmers only.
There’s a new DEX in town.
Featuring single-asset liquidity and no impermanent loss, DODOEx is a Proactive Market Maker that feels like Uniswap with a few tweaks to capital efficiency.
“DODO can provide better trade execution than Uniswap with only 1/10th the pooled capital, while sustaining a 40% APR return for LPs (without any liquidity mining rewards).”
The protocol is governed by a native token - DODO - which is distributed through a liquidity mining campaign as part of a larger “DODO Carnival” starting today.
What is DODO?
DODO is an on-chain liquidity provider akin to Uniswap, Bancor, or Balancer.
DODO’s Proactive Market Maker (PMM) leverages price oracles to mimic the behaviors of human market makers, allocating funds near the market price.
“By retrieving accurate prices of assets as input, DODO proactively provides liquidity near the market price while rapidly decreasing liquidity as it gets further from the market price.”
This ‘proactive’ liquidity aims to make capital more efficient, with added incentives for arbitrageurs to stabilize prices as a means of mitigating impermanent loss.
A glimpse at DODO’s PMM curve. More on the design here.
Of the total 1B DODO supply, 60% is set to be allocated to community incentives.
Over the first Grey Parrot period, 10.5M DODO (1.5% of total supply) will be distributed over the next three weeks, translating to 500k DODO per day.
DODO can be farmed by providing liquidity to any of the supported pools, featuring ETH, LINK, SNX, LEND, and COMP alongside a USDC base pair.
DODO is allocated evenly across all 5 pairs, with each featuring two unique pools. This means, for example, that the ETH/USDC pair has both an ETH pool and a USDC pool, and the LINK/USDC has both a LINK and USDC pool. The USDC pools are independent from each other and only provide liquidity for the given pair.
Remember, farmers can enter any of these pools with just one of the tokens, meaning there is no need to acquire liquidity for both sides of the position. Rewards are locked until 14 days after the DODO Initial DEX Offering (expected for sometime in the near future) following by a 6-month linear vesting schedule.
To maximize rewards, farmers should recognize there are two pools for every trading pair. Each pool is independent of each other in that it has its own liquidity mining rewards. To maximize rewards, farmers should add liquidity to the pools with the lowest capital.
For example, the USDC side of the LINK/USDC may be more profitable than the USDC side of the LEND/USDC pool assuming the former has less USDC liquidity than the latter.
Alongside trading incentives, DODO looks to be one of the more trusted farming opportunities we’ve shared in our Alpha Tractor series.
An audit of DODOEx was conducted by Peckshield here.
While this farm is not likely to offer immediate yield, it’s one worth seriously taking a look into for any long-term reader looking to capitalize on a strong product backed by a sound team.
All info in this newsletter is purely educational and should only be used as research. DeFi Pulse is not offering investment advice, endorsement of any project or approach, or promising any outcome. This post is prepared using public information and does not account for specific goals or financial situations. Be careful and keep up the honest work!