🔍Analysis

An in-depth analysis of DDDX.io from the community. The following content is for reference only, not as a guide.

DDDX, the DEX2.0 protocol on BNB Chain, announced the second round of project partners at the end of March. Twelve well-known projects on BNB Chain, including Beefy, Autofarm, and dForce, successively announced their participation in the veNFT governance of the DDDX protocol. Partners will participate in its governance and launch plan by acquiring veNFT and voting governance rights. According to its launch plan, the DDDX emission plan will start at 0 a.m. on April 7(UTC), starting the first week of the DDDX early staking farm. Analysis of the "Vote to earn "model for DEX2.0, DDDX Protocol listed below.

What is DEX 2.0

The DEX2.0 concept is close to the DeFi 2.0 concept, advocating the protocol itself controls the protocol fee revenue and returns all the protocol revenue to the users who hold the token. The protocol operation process is shown in the following picture.

We compare the tokenomics model of DEX 1.0 with the DDDX tokenomics model of DEX 2.0 to describe the characteristics of DDDX's DEX 2.0 mechanism:

1. Token subsidized DEX 1.0 economic model - taking SUSHI as an example

Liquidity providers get the transaction fee of this trading pair is shared through LP tokens, and staking LP is additionally subsidized by SUSHI tokens. The main role of ＄SUSHI tokens in this economic model is to support the yield of trading pairs. Under the subsidized token economic model, the SUSHI token continues to be in a state of inflation. As the circulation increases, the value of the token is constantly diluted.

2. Token governance-based DEX 2.0 economic model - Take DDDX as an example

DDDX's DEX 2.0 economic model refers to Curve's veToken governance and OlympusDAO's (3,3) mechanism.

1. The governance user will return the pair's transaction fee to the governance user who voted for this pair with veNFT.

2. Users who lock DDDX and obtain veNFT to participate in the protocol governance will not be diluted after each inflation. veNFT solves the problem that the proportion of veCRV holders is constantly cut by the newly produced CRV tokens so that users can better guarantee the long-term rights and interests of participating in governance. Because of the (3,3) inflation and non-dilutive algorithm, the DDDX token becomes a share token or similar interest-bearing token of the income of the DDDX protocol.

3. The inflation algorithm is upgraded. The number of DDDX inflation tokens every 7 days changes according to the change of the lock-up rate. Compared with the infinite and continuous inflation algorithm of the dex1.0 protocol, this algorithm locks up the consensus and binds the token inflation rate, making the algorithm more scientific. In addition to a fixed weekly reduction of 2%, token inflation will decrease if the lock-up rate increases and the value will continue to increase.

Comparing the two models, the DEX 2.0 protocol DDDX allows tokens to have real applications. In addition to participating in governance, they can also share the benefits of the protocol. The benefits of the protocol support the token's value, thereby making the token's value more stable.

Introduction to Vote to earn

To understand the mode of Vote to earn, you need to understand the various participant roles of the protocol and their participation and profit methods.

1. The best profit strategy as a liquidity provider

After the liquidity is deposited, the LP token is not staked - role A shares the corresponding proportion of the transaction fee generated by the transaction pair according to its LP token holding balance but cannot obtain the DDDX reward for the LP provider. After depositing the liquidity, stake the LP token into the Gauge contract - role B role B can get the token incentive of sharing DDDX for this transaction with the LP provider. When B obtains the DDDX token, he can lock the position as veNFT and vote for the trading pair that provides him with LP, and he will receive the transaction fee reward for this trading pair. In addition, since you have veNFT, you can bind veNFT to speed up the mining rate of DDDX when you provide an LP token stake. LP transaction fee shared by roles A and B is determined according to the balance of the number of LPs.

For example:

Suppose the current BTC/USDT transaction pair has minted 10 LP tokens, of which 60% are in stake, and the address of A holds 40% without stake if the transaction pair incurs a fee of 1,000 USD within a specific period. Then A participates in allocating a 400 USD handling fee, B gives all DDDX output rewards, and veNFT holders, i.e., voters, issue a 600 USD handling fee.

The best profit-making strategy for liquidity providers is to deposit liquidity, stake LP, lock up the position as veNFT after obtaining DDDX, and vote for the trading pair that provides liquidity to obtain transaction fees and bribery income.

2. How to “Vote To EARN”?

1. Participate in Vote profit after locking DDDX to obtain veNFT.

After locking DDDX into veNFT, users will receive a DDDX lock-up inflation reward every 7 days. According to the protocol algorithm, it will ensure that the ratio of the lock-up tokens of DDDX lock-up users to the circulation remains unchanged and will never be diluted to protect lock-up users' long-term rights and interests. Using veNFT to vote on a trading pair will increase the DDDX inflation reward for that trading pair. Voting users can share transaction fees and Bribe rewards for this transaction pair.

Participate in DDDX lock-up method: Currently, the lock-up time is between 1 week and 4 years. When the number of DDDX tokens is the same, the longer the lock-up time, the more voting rights (i.e., Voting Power) veNFT holders get.

2. How can veNFT holders participate in voting?

Voting Power is the unit of counting votes. veNFT holders can choose to vote. All the voter votes are accumulated, and all the negative votes are subtracted, that is, the effective votes of the transaction pair. According to their share of valid votes, all trading pairs are allocated the next week's DDDX output (i.e., Voting Power). Every time you re-vote, your original voting plan will be reset. veNFT holders need to redistribute 100% of their Voting Power every time they vote. When numbers in all the input boxes on the right add up to 100, click the Cast Vote button again.

Explanation of terms Vote APR: Now stake DDDX and lock the yield of participating in the voting for this trading pair for 4 years. My Stake: After providing liquidity for this trading pair, the number of assets represented by the LP token in my stake. Total Liquidity: The amount of the two token holdings in the trading pair. Total Votes: The current amount of Voting Power obtained by the trading pair. Bribes: The number of tokens that vote for this trading pair and can participate in the various bribe rewards allocated. My Votes: The amount of Voting Power I voted for this trading pair.

3. Bribe - a tool for bribery and vote-buying for token issuers

DDDX.io is a vote-buying tool for project parties/token issuers. The project party initiates canvassing by creating a vote bribery plan to obtain more veNFT votes for its token trading pair and then get more DDDX distribution shares and output. DDDX.io is a liquidity management tool for the project side. This function will replace the liquidity mining mechanism in the DEX 1.0 era, changing the tedious operation of staking LP tokens to the project's official website mining pool after the liquidity provider provides liquidity.

Summary

As a DEX2.0 product, DDDX.io is not only a secure, low-cost decentralized trading platform for trading users but also a liquidity control and management platform for protocol project parties or token issuers.

The valued support of the DDDX token includes the transaction fee income of the AMM protocol and the entire budget prepared by the token issuer for liquidity mining in the DEX 1.0.

Among all DDDX.io's announced governance partners, the DoubleClub platform is a revenue optimizer protocol customized for DDDX.io, similar to how Convex plays for Curve. We are looking forward to the launch of DoubleClub.