Automated market maker MonoX has immediately 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 assist its ambitions in decreasing the capital and liquidity conditions for decentralized finance (DeFi) tasks providing swap, lending, borrowing and spinoff capabilities on decentralized exchanges (DEXes).
The protocol will obtain this by means of the introduction of a single-sided liquidity mannequin. Although not a revolutionary idea for liquidity pools, it’ll purpose to assist the DeFi ecosystem’s development.
In conventional DEXes resembling Uniswap, trade tasks require two tokens to construct a “liquidity pair,” rising the capital barrier for entry. With the single-sided liquidity mannequin, tasks are solely required to offer their native token. As such, they’ll provide extra liquidity to the market.
Founder and CEO of MonoX, Ruyi Ren, shared his views on the potential impression of the funding:
“With numerous innovation within the DeFi house, over-collateralization has develop into an more and more huge downside. We’ll use the funding to develop the crew, additional develop and construct our neighborhood in new flourishing DeFi ecosystems like Solana.”
As soon as a DeFi venture contributes its native token, the MonoX-backed stablecoin vCASH steps in because the second token to kind the liquidity pair. Pegged 1:1 to the U.S. greenback, vCASH goals to scale back buying and selling charges generally skilled inside 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 12 months, 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.