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We will launch two kinds of liquidity pools. Trustless Listing Pools and Official Pools
We will launch two kinds 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 MonoX pool.
Such a system is beneficial to our ecosystem for 3 primary reasons:
- 1.Increased Decentralization - Single token design means that as a developer or project, you do not need a huge amount of capital (equivalent amount of ETH) to launch your token. Projects can save capital for what matters most, development, testing and auditing.
- 2.User Security — We are aware that users are weary of sketchy projects in the DeFi space. To combat that, Trustless Listing Pools on Monoswap will have vUNIT 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.
- 3.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.
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 vUNIT balance is not allowed to go past 0.
By not allowing the vUNIT balance to go below 0, we can prevent malicious actors listing a token and selling it back to themselves. If the vUNIT 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 vUNIT.
A proposal will be made for the pool and the community will vote on the pool to be accepted as an Official Pool.
However, upon launching, we will create Official Pools for some of the projects that are recognized as genuine. 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.
How Trustless Listing Pools become Official Pools
We have a built in feature for pool auto-rebalancing pools when the vUNIT amount goes below 0.
Official Pools: We always rebalance the pool when the vUNIT balance goes below 0. This means that we automatically pay off the debt should the vUNIT balance go below 0.
Trustless Listing Pools: Projects can have their pool insured, in which case when the vUNIT pool goes below 0, we can trigger a rebalance to pay off the vUNIT debt using the other token's liquidity.