2020 was a boom year for decentralized exchanges, especially AMM with the success of Uniswap. Since then, a series of projects have copied Uniswap’s model, but some have approached the problem in a different direction. Including Dodo.
What is Dodo?
Dodo is a new generation on-chain liquidity provider protocol. Unlike Uniswap, Dodo uses Proactive Market Maker (PMM) algorithm instead of Autonomous Market Maker (AMM).
According to Dodo, using PMM will have 3 main advantages over AMM:
- Increase the efficiency of use of assets.
- Avoid one-sided risks.
- Liquidity Providers do not suffer from temporary loss (Impermanent Loss).
Read more: Learn about AMM
Dodo Tokenomics
Dodo has a governance token of DODO, with two main uses: Governance, Bootstrapping Network.
Governance: DODO holders have the right to participate in voting decisions of the Dodo protocol. In the Dodo protocol, there are 3 different decentralized autonomous organizations (DAOs) with different powers:
- Admin DAO: This is the DAO with the highest authority, overseeing all DODO activities and has the right to change the way the other 2 DAOs work.
- Risk Control DAO: Responsible for adjusting risk parameters.
- Earn DAO: This is the DAO that manages the distribution of the revenue generated by the DODO protocol.
Bootstrapping Network: DODO is used to accelerate the development of the protocol through programs that create benefits for users such as liquidity mining, staking…
Dodo Token Distribution
The total fixed supply of DODO is 1,000,000,000 tokens and is distributed into 5 parts, including: Core Team/Future Hires/Advisors, Investors, Initial Liquidity Provision (IDO), Operations/Marketing/Partnerships, Community Incentives.
Team/Future Hires/Advisors
15% – 150,000,000 DODO allocated to future development team, advisors and employees. These tokens will be locked for 1 year before starting to unlock for 2 years after that.
Investors
16% – 160,000,000 DODO was sold to investors through 2 rounds of funding, Seed Round and Private Sale.
- Seed Round: Dodo successfully raised $600,000 in this round by selling 60,000,000 DODO (~6% total supply) at $0.01/DODO. This amount of tokens will be disbursed within 2 years, starting after 1 year of being locked.
- Private Sale: Dodo completed a $5,000,000 call in this round with 100,000,000 DODO (~10% of total supply) sold at $0.05/DODO. The amount of tokens in this round will be locked for 6 months, after 6 months will be paid 10% and the remaining 90% will be disbursed within 1 year.
Initial Liquidity Provision
1% – 10,000,000 DODO is used to provide initial liquidity in the pool at a price of $0.1/DODO.
Operations/Marketing/Partnerships
8% – 80,000,0000 DODO will be used as operating budget, marketing, cooperation with other projects.
Community Incentives
60% – 600,000,000 DODO is distributed to the community through a series of DODO platform incentive programs called – DODO Carnival.
- The 1st DODO Carnival (ended) includes 3 programs: Airdrop, Liquidity mining and trading rewards with a total token of 23,943,300 DODO ~ 2.4% of total supply.
- The 2nd DODO Carnival (starting October 1, 2020 – April 4, 2021) and only a liquidity mining program with reward information for pool pairs as shown in the table below.
Dodo Token Model
Supply Side: The amount of DODO tokens circulating in the market is very small, only ~ 2.215%. The next 6 months supply of DODO will mainly come from liquidity mining and staking programs with a gradual increase as rewards will be distributed within 6 months.
Demand Side: The need to buy DODO for staking to receive more DODO and participate in protocol governance.
- Staking: DODO holders can bring DODO to staking and receive an additional reward of DODO. The current reward is 6 DODO/block.
- Governance: Currently the governance feature of Dodo has not been enabled and it is not clear if after the governance feature is activated, the governance participants will receive revenue generated by a protocol such as Sushi or Uniswap. ?
Dodo Competitors
Dodo’s main competitors are decentralized exchanges applying Autonomous Market Maker algorithm such as Uniswap, Sushiswap, Curve Finance….
Dodo Performance
Trading volume
After 2 months of launch, Dodo is off to a pretty good start as the transaction volume on Dodo falls around 2-3 million a day, peaking at 20 million a day, not too bad for a new protocol. eye.
Total Value Locked
The total assets locked in Dodo have dropped quite sharply after peaking at more than $100 million. Perhaps, right after Dodo decided to reduce the reward for providing liquidity at the 2nd DODO Carnival, the TVL level was reduced.
Epilogue
Dodo is one of the projects that takes a different approach to decentralized exchanges, with initial results that are also positive.
Will Dodo take advantage of its current growth acceleration to become one of the key players on Ethereum? If not, then what’s the way for Dodo. Let’s wait and see.
Source: DODO: A Next-Generation On-Chain Liquidity Provider
– TechtipsnReview
