Using the launch of this new service, Mono X hopes to provide a cost-effective and easily accessible framework for both liquidity providers looking to launch their ventures into the market and traders looking to engage in token swap activities.
To establish a liquidity pair on a conventional decentralized exchange (DEX), such as DYdX, it is required for ventures to supply two tokens. This need raises the financial barrier to entry for new companies.
Since projects just need to stake their native tokens to get access to single-sided liquidity, they may increase the amount of total liquidity available to the market. Specifically, as per the official release, the liquidity pools that will be available at the time of launch are as follows:
When it comes to Ethereum, assets include Ether (ETH), Wrapped Bitcoin (WBTC), USD Coin (USDC), and Tether (USDT), while on Polygon, assets include Polygon (MATIC), Wrapped Bitcoin (WBTC), USDC, and Tether (USDT), among others (WETH).
Last month, the AMM secured $5 million in capital financing to assist the reduction of required capital and liquidity requirements for decentralized finance (DeFi) initiatives that provide swap, borrowing, and lending derivative services on DEXes, as well as other financial services. When this announcement was made, the project was still in its early stages of development, but it signals the beginning of its full-scale deployment in the DeFi sector.
MonoX CEO Ruyi Ren explained how the company is using single-sided liquidity pool innovation to lower the barrier-of-entry for new DeFi participants:
“Because of the usage of liquidity pairs in protocols, the capital requirements to participate in DeFi are very high. All you have to do to participate in our model is deposit your own token into the pool (0 collateral). Business owners will be able to sell their tokens without the stress of meeting capital requirements, allowing them to devote their resources to developing the project rather than providing liquidity.”
“Value Supported Tokens (VBT) are tokens that are already backed by other assets,” Ren explained more about the possible effect Value Backed Tokens might have on the broader DeFi ecosystem. Financial derivatives, gaming tokens, NFT shards, DAO tokens, and even certain stablecoins are all included in this category of cryptocurrency. Due to the fact that we do not need further collateral with MonoX, once staked Ether is produced, it may be traded on MonoX with no additional financial requirements.”