DDEX is a cross-chain decentralized transaction clearing and settlement platform run by a global community that enables better cross-chain crypto asset circulation and management on the BSC and HECO eco-systems, as well as decentralized transactions and settlement between wallets. DDEX provides many mining options for their users, and in this article, we will go over each of these mining options one by one to understand the complexities surrounding them and why they are important.
What’s in this article?
In layman’s terms, liquidity mining is a network participation strategy in which users provide capital (liquidity) to a protocol in exchange for the protocol’s native token(DDX). The important thing to remember about liquidity mining is that the main goal is “Liquidity provisioning,” which means that users are rewarded with platform native tokens, usually governance tokens, to ensure the efficient operations of a DAO model, so holders of the native tokens can vote on protocol operations.
In some circles, liquidity mining and “yield farming” are used interchangeably, and while there are similarities, yield farming does not guarantee receiving native tokens. DDEX’s liquidity mining mechanism allows users to participate in liquidity mining based on the weight of their holdings in three main trading sections: mainstream tokens, platform tokens, and innovation tokens.
Liquidity mining is attempting to level the playing field in DeFi, and some of the advantages are as follows:
- Wider reach
- Faster adoption of the DAO governance model
- Faster experimentation
- Better understanding of the protocol
DDEX uses AMM (Automated Market Maker) as a core component of their trading section. An AMM is a decentralized exchange (DEX) protocol that prices assets using a mathematical formula. Instead of using the traditional order book method, AMM prices assets using a pricing algorithm. AMM is a critical component of DDEX business functions; not only are trustless transactions possible, but AMM can also be linked to Liquidity Mining to provide liquidity. AMM can be thought of as peer-to-contract because trades take place between users and contracts created by an AMM.
When transacting on the DDEX platform, it provides DDEX users with low complexity, low gas costs, and decentralized digital currency transactions that do not require off-chain input. This enables investors to earn income quickly and easily while also increasing revenue through liquidity.
Some of the benefits of AMM are as follows:
- High Capital efficiency and low slippage
- Optimize temporary losses
- Multi token exposure
- Transaction fee distribution
DDEX also provides a referral mining option, in which users can invite new users to register on the platform and receive 2% of the invitees’ mining returns. Here’s how it works:
- A platform user invites a new user.
- New user registers
- A new user adds liquidity.
- When a new user contributes liquidity, the old user receives a 2% mining reward.
- The new user establishes an invitation relationship with the old user, which activates the old user’s 2% mining rewards and adds them to the current income.
DDEX uses a DAO governance model, which means that governance functions are managed by active user communities rather than a single central entity. Users acquire platform governance rights by participating in the DAO community for 30-60 days and staking DDX, the platform token. Among the governance functions are, but are not limited to:
- The weight parameters of liquid mining pools
- transaction fees
- repurchase and burn weights
- halving cycles.
- New mining pools for tokens
These aforementioned functions would be determined by the DAO community, in line with DDEX’s mission of achieving true decentralization. The weight of a user’s holdings of the governance token “DDX” is used to calculate voting rights. What you should know is that DDEX voting rights are calculated based on tokens held and staked. In accordance with the DAO governance model, a token held counts for one vote, whereas a token staked counts for two votes.
DDEX offers a decentralized platform that embodies the true meaning of Defi and blockchain. DDEX appears to be a promising project to watch in the future, with different revenue models and a plethora of mining options, as well as a DAO governance model.