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Last updated: Aug 14, 2023
DODO is a multi-chain decentralized exchange, initially built on Ethereum and later expanded to other chains and L2 solutions, such as Arbitrum, Polygon, and Binance Smart Chain. This DeFi protocol uses a so-called proactive market-making model while also operating as an on-chain liquidity provider. DODO is making it a priority to create user-friendly interfaces while also promising sweet returns and reducing the risk of impermanent loss. DODO supports numerous pairs of assets, and there are plenty of opportunities for liquidity providers on the platform.
DODO was created in August 2020 by a team of blockchain developers which included Mingda Lei, Qi Wang, and Diane Dai. The new exchange was named after the characters’ race of Nintendo's Animal Crossing game.
DODO’s main feature is its Proactive Market Maker (PMM) model that involves oracles, DEX-aggregators, and on-chain liquidity providers working together to enhance common automated market-making practices giving its users the best rates and prices. For that, the protocol also uses its SmartTrade routing algorithm aimed to ensure that prices on DODO are at least as good or even better than other DEXs.
DODO offers different options to users willing to provide liquidity on the platform. Such as Vending Machine, which offers permissionless pools for anonymous LPs, or Private Pool, which allows customizing price and other parameters. DODO also offers NFT minting, trading, and fragmentation.
Some DODO services are tailored to support promising projects, such as Combiner Harvesting which offers DODO tokens as rewards for providing liquidity, or Crowdpooling, which allows users to crowdfund new tokenized assets by creating liquidity for them while receiving DODO tokens as rewards.
Users of the DODO app can buy and sell tokens as well as participate in new token offerings and provide liquidity to earn tokenized rewards. Project owners can use the platform to create new tokens, crowdfunding campaigns, as well as pools of funds and liquidity mining campaigns. DODO fees include 0.3% of the transaction per trade.
The DODO app can also be used to create and trade NFTs. To do so, users need to connect a wallet DODO supports and navigate to the NFT section of the dApp, where if the “Create NFT” option is chosen they need to specify whether it will be under the ERC-721 or ERC-1155 format.
DODO offers its users two NFT fragmentation models to facilitate cases where the scarcity of high-value NFTs makes it difficult to build communities. The Buyout fragmentation model is meant to target high-value NFTs with low turnover rates, while the Retail fragmentation model is recommended for low to medium value NFTs with high turnover rates.
The DODO Vending Machine model can be used by community-driven projects who have trouble with bootstrapping their token’s initial liquidity, as it enables them to set a bonding curve depending on which the token’s value will increase and decrease the more it is traded. At the same time, the program can be useful to projects wanting to maintain and manage the price of their token. Such are algorithmic stablecoins. The DODO app Vending Machine mechanics can also be used to minimize speculations over a token’s value and combat artificial “pumps”.
DODO is an ERC-20 standard token with a limited supply of 1 billion. It is used for governance of the platform where 1 DODO equals one vote. DODO tokens are also used for crowd pooling or IDO on the launch of new assets while providing fee discounts for holders.
DODO protocol implements a loyalty program for DODO holders allowing them to mint vDODO tokens. Each vDODO token corresponds to 100 DODO locked in the protocol. vDODO holders receive membership rewards from the platform in addition to dividends paid from trading fees.
All three DODO team founders are currently involved with the project in top-management roles. Mingda Lei known as Radar Bear on Twitter is the CEO at DODO, Diane Dai aka Dai Dai on Twitter is a Chief Marketing Officer (CMO), and Qi Wang is the Chief of Operations. According to the LinkedIn page, Aladdin Zhang is the CTO at DODO. DODO audits can be found in the protocol dashboard on this webpage
In March 2021, the DODO exchange was hacked with an attack that targeted its V2 Crowdpooling smart contract. The attackers stole around $3.8 million worth of digital assets from several DODO crowdfunding pools. $3.1 million of the funds were recovered.
The attacker created a counterfeit token and used a flaw in one of the functions of the smart contract, which allowed it to be called numerous times with different parameters. After changing the “reserve” variable of the token the attackers used a flash loan to extract real tokens from the exchange’s pools.
An interesting occurrence in the incident was that the attackers fell victim to an attack themselves, as they were targeted by bots in a front-running attack - events where a malicious user observes a swap transaction after it is broadcasted but reorders it before it is finalized to benefit themselves, this usually happens by setting the fee level much higher on the bot’s transaction, than that of the original one, thus triggering nodes to prefer it. As a result of the DODO hack, $3.1 million of the funds were returned by two owners of such bots. $200,000 of the remaining stolen tokens were frozen on exchanges, however, the attackers still managed to steal $700,000 worth of assets.
DODO is driven by its multi-chain strategy declaring a three-tiered approach to DeFi integration that targets layer-one (L1), layer-two (L2), and sidechain networks. Once DODO integrates with a level-1 blockchain, all the assets of that chain become accessible to DODO users.
With that in mind, a platform initially based on Ethereum and Binance Smart Chain (BSC), DODO has since integrated with Huobi ECO Chain (HECO), Polkadot (through Moonbeam’s Moonbase Alpha testnet), and Solana. DODO is also integrated with Polygon and Arbitrum L2 solutions. And the number of chains is expected to grow.
The platform initially attracted $0.6 million of investments in a seed round led by Framework Ventures. An additional $5 million were secured by DODO during a private sale funding round led by Pantera Capital, Binance Labs, and Three Arrows Capital. DODO also lists Coinbase Ventures, Galaxy Digital, CMS Holdings, and Alameda Research among its investors.
In the latest version of the DODO roadmap, project developers promise to continue DODO’s multi-chain expansion. Among the networks announced for integration are Aurora, NEAR Protocol, Avalanche, Boba, Fantom, Moonriver, Neon Labs EVM or Solana, and Optimism L2 solution.
The future versions of DODO will enhance UI/UX on the platform as well as introduce new options for users such as limit orders, request for quote (RFQ) mode, and additional possibilities for NFT trading.
From the point of decentralization, DODO plans to launch a DAO for risk parameter fine-tuning.
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