Automated market maker MonoX has immediately introduced a debut capital elevate of $5 million from enterprise corporations together with the likes of Axia8 Ventures, Animoca Manufacturers, Divergence Ventures, amongst others.
MonoX will use the funds to help its ambitions in lowering the capital and liquidity stipulations for decentralized finance (DeFi) tasks providing swap, lending, borrowing and spinoff capabilities on decentralized exchanges (DEXes).
The protocol will obtain this by the introduction of a single-sided liquidity mannequin. Although not a revolutionary idea for liquidity pools, it would intention to help the DeFi ecosystem’s progress.
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 supply their native token. As such, they will provide extra liquidity to the market.
Founder and CEO of MonoX, Ruyi Ren, shared his views on the potential impression of the funding:
“With loads of innovation within the DeFi area, over-collateralization has change into an more and more large drawback. We’ll use the funding to develop the workforce, 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 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 about 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 on no account the primary utility of this type inside within the DeFi area.
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.