Comment on page
Protocol Owned Liqudity
The majority of DEXs are running on outdated mechanisms and incentive structures. Liquidity mining is used to incentivize users to deposit liquidity to the protocol. However, it fosters an environment where the protocol’s native token is subject to long-term selling pressure from farmers in exchange for short-term incentives.
This LM model has been proven to be unsustainable and the introduction of bonding programs to create a treasury with assets owned by the protocol itself, not the users (Liquidity Providers) has its advantages when applied to an AMM or DEX.
We will offer bonding for users to sell their LP tokens back to us (MonoX Protocol), in exchange for our reserve currency vUNIT. vUNIT is vested to users over 5 days with a rebase occurring every 8 hours.
The primary benefit for users considering the exploit means that the risk of depositing assets to our contract is carried to us, the protocol, and not incurred by the user.
The primary benefit for us, is that the LP tokens are then owned by us the protocol and we can use it as permanent liquidity on our platform and help us to function as a perpetual market maker for our own DEX.
We believe that moving forward with this model will be a vast improvement for all participants of our ecosystem.
MonoX 2.0 will allow users to sell their LP tokens or certain assets (eth) back to the protocol in exchange for vUNIT, the protocol's reserve currency. This process will occur using a bonding curve that sells vUNIT to the user at below market price. Users who sell assets to the protocol using the bonding curve will receive vUNIT through a 5-day vesting schedule. vUNIT is backed by protocol owned liquidity (our Treasury), which is fed by the bonding mechanism.
vUNIT can be staked natively on MonoX to generate yield. The bonding mechanism combined with vUNIT staking creates an opportunity for users to offload LP risk while gaining access to liquidity and earn yield on their vUNIT. After you have cliamed your vUNIT, you can opt to stake.