The automated market maker MonoX is now in beta development and is expected to go live in Q3 of 2021, according to the company.
MonoX, an automated market maker, today announced a $5 million capital investment from venture capital firms including Axia8 Ventures, Animoca Brands, and Divergence Ventures, among others. The funds were raised in the company’s first round of funding.
Specifically, MonoX will utilize the funds to promote its aspirations of lowering the capital and liquidity requirements for decentralized finance initiatives that provide swapping, lending, borrowing, and derivatives capabilities on decentralized exchanges, among other things.
Through the implementation of a single-sided liquidity model, this goal will be achieved by the protocol. Despite the fact that it is not a groundbreaking concept for liquidity pools, it will strive to help the development of the DeFi ecosystem.
Traditional decentralized exchanges such as Uniswap require two tokens to form a “liquidity pair,” raising the bar for admission by increasing the required capital.
With the single-sided liquidity model, projects are only required to give their native token as a means of obtaining liquidity. As a result, they are able to provide additional liquidity to the market.
Mr. Ruyi Ren, the founder and CEO of MonoX, expressed his thoughts on the potential impact of the funding:
“With a lot of innovation in the DeFi space, over-collateralization has become an increasingly big problem. We will use the funding to grow the team, further develop and build our community in new flourishing DeFi ecosystems like Solana.”
A DeFi project provides its native token, and the MonoX-backed stablecoin vCASH acts as the second token in a liquidity pair, completing the contribution. vCASH, which is pegged 1:1 to the United States dollar, intends to eliminate trading fees that are typically encountered in the transactions of standard automated market makers (AMM).
MonoX plans to debut its mainnet version on the Ethereum and Polygon blockchains in Q3 2021, following the release of its beta version.
Despite the enormous potential of single token liquidity, this is not the first instance of this type of application in the DeFi sector, despite the fact that it is the most recent.
AMM Bancor released “liquidity mining 2.0” around the same time last year, a single token liquidity provision aimed to solve the creeping issues of maintaining liquidity and volume in the DeFi markets.
