Ever since DODO’s Chainlink integration was announced in late August this year, the DODO team has proven that its oracle-based proactive market maker (PMM) is a viable on-chain liquidity solution, and that market-leading liquidity can be achieved without massive pools. The fact that DODO is currently one of the best liquidity pool DEXs for its trading pairs is a testament to its remarkable capital efficiency and immense popularity. DODO is quickly establishing itself as one of the major players in the decentralized exchange space thanks to its unique oracle-enabled design using Chainlink.
DODO’s biggest competitive advantage is how well it allocates capital with Chainlink price reference data at its disposal. Given an external market price, DODO’s PMM dynamically adjusts the price curve to ensure that the liquidity near the market price is always the highest. This translates to a low-slippage trading experience, where traders almost always get the best bang for their buck on DODO. DODO is thus able to sustain its daily trading volume consistently above $5 million (source: DeBank).
What’s more, thanks to its high capital efficiency, DODO’s PMM requires less locked funds to function and deliver liquidity at a level close to or better than its competitors. Data shows that DODO’s total value locked (TVL) is a fraction of other decentralized exchanges, hovering at around $40 million, yet still offers the best capital efficiency.
As the DODO Exchange continues to onboard more assets and market making strategies on-chain, we have been working with the Chainlink team to further increase the reliability and precision of our oracle solution to match these growing demands. Decentralized price oracles are the cornerstone of the DODO platform, as DODO’s advanced asset pricing and capital allocation smart contracts depend on them to unlock PMM’s full potential.
Since its inception, DODO has greatly benefited from using Chainlink’s secure, tamper-proof, and high quality price reference data feeds in its quest to kickstart an on-chain liquidity revolution. The DODO team is now working extensively with Chainlink’s team of oracle experts to further expand upon our initial success by creating an even lower deviation oracle solution to meet DODO’s unique and growing DeFi needs.
One of the major improvements is Chainlink recently launching its oracle network natively on Binance Smart Chain (BSC), allowing us to build oracle solutions at the native throughput of BSC. Additionally, Chainlink’s upcoming off-chain aggregation solution will allow DODO to further improve its PMM through substantial reductions in on-chain costs. Both of these solutions will result in much lower deviation thresholds for updates, further improving DODO’s ability to generate highly secure, low-slippage on-chain liquidity for DeFi users.
DODO and Chainlink developers will continue to liaise extensively with each other and explore more exciting possibilities for PMM and on-chain market making. We look forward to releasing more updates as we move further along in this initiative.
DODO is a next-generation, capital-efficient on-chain liquidity platform, which leverages the Proactive Market Maker algorithm (PMM) to provide pure on-chain and composable liquidity for everyone. Featuring single-asset liquidity and working to solve impermanent loss, DODO offers a smooth trading experience and lucrative liquidity provision opportunities.
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Chainlink is the most widely used and secure way to power universal smart contracts. With Chainlink, developers can connect any blockchain with high-quality data sources from other blockchains as well as real-world data. Managed by a global, decentralized community of hundreds of thousands of people, Chainlink is introducing a fairer model for contracts. Its network currently secures billions of dollars in value for smart contracts across the decentralized finance (DeFi), insurance and gaming ecosystems, among others.
Chainlink is trusted by hundreds of organizations to deliver definitive truth via secure, reliable data feeds. To learn more, visit chain.link and follow @chainlink on Twitter.
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