Markets Making

An Inclusive Approach

In the dynamic landscape of the 0Fx ecosystem, market making is a pivotal component ensuring the fluidity and efficiency of internal markets. Unlike traditional decentralized exchanges (DEX) that rely on 50/50 liquidity pools, our approach involves the use of single-token liquidity pools, revolutionizing how markets are introduced and sustained within our ecosystem.

Synthetic Tokens Minting and Unique Exchange Pairs

Our single-token liquidity pools will be utilized for minting synthetic tokens at a 1:1 ratio, representing their initial positions within reputable protocols. Users within the ecosystem and dashboard will earn rewards solely by holding tokens, even before placing them.

Key Exchange Pair Information

For ecosystem exchange pairs, the only 50%/50% token pool is the 0Fx/USDT pair. Serving as the main pair for all single-token liquidity pairs, it acts as the primary entry point to all ecosystem tokens, requiring liquidity and indexing all single-token liquidity pools.

Mechanics of Market Making

1. Token Launch Price Fixation: The introduction of new tokens within our ecosystem follows a unique mechanism. Token prices are initially fixed based on the launch price, and only tokens from decentralized applications (dApps) are added to these liquidity pools. This approach enables market creation without the need for pre-existing total value locked (TVL) in liquidity pools.

2. Dynamic Liquidity Creation: Liquidity is dynamically generated as investors inject funds into these pools while purchasing a token. This innovative model allows the market to organically evolve, establishing a delicate balance between supply and demand.

3. Market Self-Regulation: The market, fueled by investor contributions, self-regulates as liquidity is injected. This distinctive feature minimizes the hurdles of traditional liquidity pool setups and paves the way for flexible, user-driven markets.

Fees and Redistribution

1. Fees from Internal Ecosystem Trades: The 0Fx protocol captures daily trading fees from single-token liquidity pool. These fees are collected from all trades executed within the ecosystem's internal markets.

2. Redistribution of Fees: The collected fees are then redistributed, aligning with our commitment to a user-centric ecosystem. 50% of the fees are channeled back into the 0Fx protocol token, ensuring that users benefit directly from the ecosystem's trading activities.

3. Equitable Distribution: The remaining 50% of fees is distributed among all dApp tokens in proportion to the volumes on their respective markets. This ensures an equitable distribution of fees across the entire ecosystem.

A Paradigm Shift in Crypto Exchanges

Traditional players in crypto exchanges often absorb a significant portion of the market — estimated to be nearly 20% — by privately benefiting from exchange fees without any redistribution. By adopting such solutions, we inadvertently contribute to the gradual loss of an ecosystem that should rightfully belong to its users, instead falling into the hands of centralized institutions.

In contrast, the 0Fx ecosystem champions a paradigm shift by redistributing exchange fees to users by the 0Fx token or by dApp tokens, fostering an environment where benefits are collectively shared. Through this inclusive approach, we empower users to be true stakeholders in the ecosystem's growth, ensuring a fair and sustainable decentralized future.