One of the driving reasons behind the creation of MoniX was to make it easier and less capital intensive for smaller DeFi projects to launch their tokens. The unique design of our liquidity pools makes that possible.
Along with Single Token Liquidity, which we discussed in our previous article. We will launch two different types of liquidity pools. There will be “Trustless Listing Pools”, whereby any user is able to launch a token and create a liquidity pool. Additionally, we will have “Official Pools” which have passed a community DAO vote to become an official MoniX pool. However at launch we will have “Official Pools” already for the most popular DeFi tokens.
Key Benefits of Having Both Trustless Listing and Official Pools:
- Increased Decentralization — Monixwap’s single token design enables developers or projects to launch their tokens with zero capital as they do not need the extra capital for the pair. This way, projects are able to save capital and direct it to more important areas such as development, testing and auditing.
- User Security — We are aware that users are weary of sketchy projects in the DeFi space. To combat that, Trustless Listing Pools on Monixswap will have vUSD balances that cannot go below zero. However it is still up to the community to always check the contract address and use their discretion when investing in a new project.
- Quality Control and Regulation — One of our primary concerns is security and with Trustless Pools as well as Official Pools, we can easily separate the scam projects while supporting and promoting genuine projects. We all know DeFi is saturated with scammers and “pump and dump” projects. As we scale up to offer fair launch services we make it easier for the true and dedicated developers and projects to be recognized.
Liquidity Pool Type 1: Trustless Listing Pools
Monixswap allows the trustless listing of new tokens. Trustless listings create single token liquidity pools, where deposited tokens are grouped with the vUSD stablecoin.
Trustless listing means that anyone (project or developer) can write a smart contract, create a pool for their token, and add liquidity so it can be launched and traded. However, a built-in feature to safeguard against malicious token listings is that for trustless listings, the vUSD balance is not allowed to go past 0.
By not allowing the vUSD balance to go below 0, we can prevent malicious actors listing a token and selling it back to themselves.. If the vUSD balance goes to 0 then people cannot sell the token anymore. However, it is still possible to buy the token. As a result, a user cannot list a token, set the price and add liquidity, then sell all the tokens back themselves into vUSD.
Liquidity Pool Type 2: Official Pools
Upon launching, we will create Official Pools for some of the projects that are recognized as genuine, these will be a selection of blue chip DeFi coins and other popular coins. The community will be able to provide liquidity on these pools immediately when we launch. Additionally, we will reach out to partner projects with the aim of setting up an official pool for their token and seeding the pool with liquidity should they wish to.
Going forward, upon DAO creation, Official Pools will have to be approved by the community through proposals and a DAO vote. The liquidity pool functions exactly the same way for the end user: swapping, adding and removing liquidity is the same process. However, the pool dynamics are slightly different for the Official Pools because the vUSD balance can go below 0.
How Trustless Listings Become Official Pools
A Trustless listing pool can be converted to an Official Pool through DAO voting. A proposal will be made for the pool and the community will vote on the pool to be accepted as an Official Pool. Once it’s approved as an Official Pool, adding liquidity only requires Token A.
We hope this helped you understand liquidity pools on MoniX. If you have any questions, leave a reply or reach out to us on Telegram or Twitter. You may also browse through our website or visit our Docs.
