MonoX, an automated market maker (AMM), has announced the debut of its mainnet platform, on the Ethereum and Polygon blockchain networks the mainnet will provide investors with full swap and liquidity capabilities.
Mono X hopes to create a cost-effective and accessible infrastructure for liquidity providers looking to bring their projects to market and traders looking to engage in token swap services with the launch of this new service.
Traditional decentralized exchanges (DEXes), such as dYdX, require projects to provide two tokens in order to create a liquidity pair, a requirement that raises the capital barrier to entry.
Projects that use the single-sided liquidity feature only need to stake their native token, allowing them to provide more overall liquidity to the market.
The liquidity pools that will be deployed at launch, according to the official announcement, are as follows: Ether (ETH), Wrapped Bitcoin (WBTC), USD Coin (USDC), and Tether (USDT) are among the Ethereum assets, whereas Polygon (MATIC), WBTC, USDC, USDT, and Wrapped Ether are among the Polygon assets (WETH).
Last month, the AMM raised $5 million in capital funding to help decentralized finance (DeFi) businesses that offer swap, borrowing, and lending derivative services on DEXes lower their statutory capital and liquidity requirements.
The project was still in beta at the moment, but this news marks the start of a full-scale deployment in the DeFi space.
MonoX CEO Ruyi Ren explained how the company is using single-sided liquidity pool innovation to lower the barrier-to-entry for new DeFi members to Cointelegraph:
“Protocols that use liquidity pairs result in capital requirements to participate in DeFi being high. With our model, all you need to do is deposit your own token to the pool (0 collateral). Project owners can list their tokens without the burden of capital requirements and focus on using funds for building the project instead of providing liquidity.“
Ren also discussed the possible impact Value Backed Tokens could have on the DeFi ecosystem as a whole:
Value Backed Tokens (VBT) are tokens that are already backed by other assets. Financial derivatives, game tokens, NFT shards, DAO tokens, and even some stablecoins all fall into this category. With MonoX, we don’t require extra collateral so once a staked Ether is minted, it can be tradable on MonoX with zero capital requirement.
