Automated market maker MonoX has in the present day introduced a debut capital increase 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 decreasing 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’ll intention to help the DeFi ecosystem’s progress.
In conventional DEXes comparable to Uniswap, trade tasks require two tokens to construct a “liquidity pair,” growing the capital barrier for entry. With the single-sided liquidity mannequin, tasks are solely required to supply 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 a number of innovation within the DeFi area, over-collateralization has change into an more and more large downside. 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 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 under no circumstances the primary utility of this sort 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.