MonoX raises $5 million to launch a single token liquidity pool

Automated market maker MonoX announced today that it has raised $5 million in funding for the first time from venture capital firms such as Axia8 Ventures, Animoca Brands, and Divergence Ventures.

MonoX will use these funds to support its ambition to reduce the capital and liquidity prerequisites of decentralized finance (DeFi) projects that provide swaps, lending, lending, and derivative functions on decentralized exchanges (DEXes).

The agreement will achieve this by introducing a unilateral liquidity model.Although not a revolutionary concept Liquidity pool, It will aim to support the growth of the DeFi ecosystem.

In traditional DEXs such as Uniswap, industry projects require two tokens to build a “liquidity pair”, which increases the capital threshold for entry. Using the unilateral liquidity model, the project only needs to provide its native token. Therefore, they can provide more liquidity to the market.

MonoX founder and CEO Ren Ruyi shared his views on the potential impact of this financing:

“With a lot of innovation in the DeFi field, over-collateralization has become a growing problem. We will use this funding to grow the team, further develop and build our community in the emerging and thriving DeFi ecosystem such as Solana .”

Related: Derivatives exchange dTrade raises US$22.8 million for market makers

Once the DeFi project contributes its native token, the stablecoin vCASH supported by MonoX will step in as the second token to form a liquidity pair. vCASH is 1:1 pegged to the U.S. dollar and aims to reduce transaction fees that are common in traditional automated market maker (AMM) transactions.

MonoX will launch its mainnet version on the Ethereum and Polygon blockchains in the third quarter of 2021.

Although the liquidity potential of a single token is huge, this is by no means the first such application in the DeFi field.

At this time last year, both AMM Bancor Launched the so-called “Liquidity Mining 2.0” — The single token liquidity clause is designed to overcome the potential challenges of maintaining the liquidity and transaction volume of the DeFi market.