It essentially calculates one integral and two quadratic equations to create an efficient market-making algorithm. It will give on-chain contract-fillable liquidity to all assets.Īt the core of PMM is a bit of complicated math. The PMM is an algorithmic market maker but on steroids. This system capitalizes on traditional AMM and order book-based exchanges flaws, as they either cannot provide the liquidity or are expensive and dependent on human input. This effectively mitigates the risk for impermanent losses, making liquidity provision less risky on DODO. What is unique is that the PMM proactively shifts the price curve achieving the same efficient liquidity structure displayed above this system has proven to be superior as it provides sufficient liquidity for limitless pairs while simultaneously benefitting liquidity providers (LPs). The PMM encourages arbitrage trading to ensure the prices match that of the market price. This system rapidly decreases the amount of liquidity away from the market price, allowing for a more efficient system compared to that of a traditional AMM like UniSwap.īelow represents the liquidity curve for each of the automated market makers. It then uses this oracle data to calculate an ideal market price, where it will then sell the liquidity tokens for the quote token based on the curve displayed below. The PMM mechanisms make use of price oracles to retrieve accurate information about the price of an asset. This model creates low slippage and mechanisms that minimize impermanent loss (IL), displaying the incredible innovation that DODO AMM provides. There will always be sufficient liquidity for a trade, just like it would on a centralized exchange (CEX). DODO has also acquired funding from the likes of Coinbase Ventures, Galaxy Digital, CMS Holdings, and Alameda Research. DODO completed a successful $5 million private sale funding round in September 2020 led by Pantera Capital, Binance Labs, and Three Arrows Capital.

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