Automated market maker MonoX has at present introduced a debut capital increase of $5 million from enterprise companies together with the likes of Axia8 Ventures, Animoca Manufacturers, Divergence Ventures, amongst others.
MonoX will use the funds to help its ambitions in decreasing the capital and liquidity conditions for decentralized finance (DeFi) initiatives providing swap, lending, borrowing and by-product capabilities on decentralized exchanges (DEXes).
The protocol will obtain this via the introduction of a single-sided liquidity mannequin. Although not a revolutionary idea for liquidity pools, it should goal to help the DeFi ecosystem’s progress.
In conventional DEXes resembling Uniswap, business initiatives require two tokens to construct a “liquidity pair,” growing the capital barrier for entry. With the single-sided liquidity mannequin, initiatives are solely required to offer their native token. As such, they will supply extra liquidity to the market.
Founder and CEO of MonoX, Ruyi Ren, shared his views on the potential influence of the funding:
“With a whole lot of innovation within the DeFi house, over-collateralization has develop into an more and more huge downside. We’ll use the funding to develop the group, additional develop and construct our group in new flourishing DeFi ecosystems like Solana.”
As soon as a DeFi undertaking contributes its native token, the MonoX-backed stablecoin vCASH steps in because the second token to type the liquidity pair. Pegged 1:1 to the U.S. greenback, vCASH goals to cut back buying and selling charges generally skilled throughout the transactions of conventional automated market makers (AMM).
MonoX is ready to launch its mainnet model on the Ethereum and Polygon blockchains in Q3 2021.
Regardless of the huge potential of single token liquidity, that is not at all the primary software of this type inside within the DeFi house.
This time final yr, fellow AMM Bancor launched what it called “liquidity mining 2.0” — a single token liquidity provision designed to beat the insidious challenges of sustaining liquidity and quantity within the DeFi markets.