Common Questions

Is there any mechanism to help funding pool balanced?

Taking the ETH-USDC trading pair as an example, DODO will charge users ETH as transaction fee when they buy ETH. And USDC as transaction fee when selling ETH. Statistically speaking, buying and selling behavior is roughly balanced, so the absolute returns of the two assets pool are roughly the same. In this way, when the size of one asset pool is smaller, the rate of return will be higher. The high yield will encourage liquidity providers to deposit into the smaller funding pool until the value of the two assets pool returns to balanced.