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Diane Dai is the Co-Founder and CMO of DODO, a decentralized exchange and on-chain liquidity provider. DODO is a next-generation on-chain liquidity provider, which leverages the Proactive Market Maker algorithm (PMM) to provide pure on-chain and composable liquidity for everyone.
What initially attracted you to crypto?
What interested me about crypto was the social justice potential of this new technology. I’ve always felt that everyone, everywhere should have the ability to engage in commerce and grow their wealth with ease and minimal third-party interference. With the spread of cryptocurrency adoption and the advent of decentralized finance, this dream finally has the opportunity to become a reality.
As I became more involved in the DeFi sphere, I noticed the underrepresentation of women in the community. I decided to use my newfound platform and voice to be an active role model and champion for women’s involvement in DeFi projects. I hope that other women interested in this space will come across my story and maybe get inspired themselves, too.
You were the founder of one of the first and biggest Defi communities in China. Could you give us an insider perspective on how the Chinese community views DeFi in general?
In my experience, the Chinese crypto community has been very passionate about DeFi and has had considerable involvement with DeFi projects almost as soon as they started to appear on the scene. The community’s social media forums frequently arrange AMAs, knowledge transfer sessions, and even real-life community meetups. The explosion of interest in DeFi in mainland China shows no sign of slowing down, and I hope to continue to play a part in this unprecedented movement.
Could you share the genesis story behind DODO?
It all started when Radar Bear and I evaluated some of the new DEXs that appeared on the scene last summer. The AMM algorithm they were using was decent enough, but we knew there had to be a better, more efficient way to determine asset prices. That’s when we realized we could use external oracles to improve capital efficiency. We quickly got to work on making that idea a reality, and soon we gathered a dynamic worldwide team of crypto visionaries, and, as they say, the rest is history.
How does DODO differentiate itself from competitors such as Uniswap?
Decentralized exchanges such as Uniswap often suffer from low liquidity and high volatility, as well as minimal customization. On the other hand, DODO uses the innovative Proactive Market Maker (PMM) to determine the price of crypto assets via oracles dynamically. This results in reduced impermanent loss and lower slippage compared to our competitors who use the AMM model. In addition, DODO has a unique alternative to the traditional ICO system, using our Crowdpooling process to distribute new coins to interested investors at low cost and with high liquidity.
Could you explain the Impermanent Loss problem for liquidity providers and how DODO is trying to solve it?
Impermanent loss is the loss to liquidity providers that results from changing token prices, causing shifting base and quote token ratios in a liquidity pool. If a token grows in price substantially, the pool rebalancing by arbitrage traders could result in significant losses for LPs compared to just holding those assets.
DODO reduces the risk of impermanent loss by using external price oracles. These oracles automatically determine the price of assets in DODO’s liquidity pools, setting them deliberately lower than major exchange prices to promote pool rebalancing by arbitrageurs. This minimizes impermanent loss and creates an attractive platform for liquidity providers.
Could you give us more details on what Proactive Market Maker (PMM)? And why is it important?
The Proactive Market Maker is DODO’s flagship feature. The PMM is an algorithm that dynamically determines the price of tokens in a liquidity pool based on market activity. Unlike traditional AMMs, which only allow for one relation between bid/ask orders and a fixed price, the PMM enables users to create a pool with a completely customizable curve to accommodate various market scenarios.
The ‘liquidity parameter,’ better known as ‘k,’ determines the shape of this curve. The greater the value of k, in the range [0,1], the less the price shifts when near the mid-price – and the more liquidity there is in the pool. By giving DODO LP creators the option to determine their balance between available liquidity and price sensitivity to market activity, users can gain a decisive liquidity advantage compared to those who use our competitors.
What is your vision for DODO in the next 5 or 10 years?
It’s pretty hard to answer this question because crypto technology and the DeFi sphere could become completely unrecognizable over those 5 or 10 years. At DODO, we strive to be ahead of the curve and deliver the most innovative and cutting-edge features that the community wants. My only prediction for the future is that it will be unpredictable!
That said, our primary goal at the moment is for DODO to become fully decentralized. The community voting initiatives we’ve been launching recently are a crucial step toward fully decentralized community governance. Starting in September, we will have a DAO set up to give the community control over how the money in the community treasury is spent, various parameters that govern the liquidity pools on DODO, and other crucial issues.
While some of these initiatives have sparked heated discussion, we at DODO believe that community governance will ultimately unite more than it divides. It’s powerful and effective when people have a say in handling their own assets.
Is there anything else that you would like to share about DODO?
DODO is hiring! If you’re passionate about DeFi and want to join us in creating the on-chain liquidity revolution, please don’t hesitate to apply by sending your resume to firstname.lastname@example.org. Though we’re based in Singapore, we are a truly global company. We work with talent from anywhere in the world – join us!
Thank you for the great interview, readers who wish to learn more should visit DODO.