@DODO is a decentralized trading platform that utilizes the Proactive Market Maker (PMM) algorithm to enhance on-chain liquidity for Web3 assets. The platform distinguishes itself from traditional AMM (Automated Market Maker) models by actively adjusting liquidity in response to real-time market conditions.
### How the PMM Algorithm Functions
Unlike the passive nature of AMM, the PMM algorithm at @DODO gathers external data such as price feeds from decentralized oracles. This information allows it to concentrate liquidity near market prices, providing more precise and less wasteful liquidity management. By doing so, $DODO significantly reduces slippage for traders and mitigates impermanent loss for liquidity providers【8†source】【10†source】.
### Key Advantages
1. Deeper Liquidity: @DODO’s PMM algorithm outperforms traditional AMMs in providing more effective liquidity. It avoids over-supplying liquidity where it's unnecessary and instead focuses on aligning with market demand【9†source】.
2. Lower Slippage: By actively adjusting liquidity pools and concentrating liquidity around actual market prices, $DODO significantly reduces slippage, making trades smoother and more efficient for users.
3. Single-Sided Liquidity: @DODO allows liquidity providers to deposit a single asset into a pool, unlike many AMM models that require liquidity in equal amounts of two tokens. This single-sided liquidity provision lowers barriers to entry for market participants【9†source】【8†source】.
4. Customizable Pools: For market makers, $DODO provides unparalleled customizability. Liquidity providers can adjust price parameters and liquidity levels as needed, ensuring more effective liquidity management and reducing risks like impermanent loss【8†source】.
### Use Cases
- Traders using @DODO benefit from minimized slippage and highly competitive prices, thanks to the dynamic nature of the PMM algorithm.
- Liquidity Providers are attracted to $DODO’s flexible liquidity management system, which reduces the risk of impermanent loss and allows for efficient capital deployment.
- Market Makers find the platform particularly useful, as @DODO allows them to control their liquidity pools, set custom price levels, and manage liquidity effectively【10†source】.
In essence, $DODO brings a new level of efficiency and flexibility to decentralized trading, leveraging its PMM algorithm to offer enhanced liquidity management, lower slippage, and customizable liquidity pools for all types of users in the Web3 ecosystem.
