“It’s no secret that the cryptocurrency market has suffered a substantial decline in interest from investors in recent months. With prices dropping, investors have pulled back from liquidating their portfolios, leaving many startups who raised funds in the past year or two with a liquidity problem. Many projects are now struggling to generate enough cash to cover their expenses, forcing some to shut down completely and others to lay off substantial portions of their workforce.
The problem is that today, it’s difficult to buy small amounts of cryptocurrencies. Platforms like Coinbase, for example, have minimum purchase amounts, which for many people are too high. And if you’re looking to buy a small amount of cryptocurrency such as $10, $20, or $30 worth, you’re out of luck.
The $2 trillion crypto-currency market has a million dollar problem: This is the case for small decentralised finance (DeFi) projects, which suffer from low pool liquidity and a high number of slippage transactions, even though the market as a whole continues to grow.
Unilateral liquidity for multilateral benefit
While cryptocurrency traders with large market cap can easily enter and exit trades, token holders with market cap of tens or hundreds of millions often have to sell their assets on the centralized exchange (CEX), putting them at a disadvantage (they are exposed to opportunistic bots and hidden market makers on the centralized exchange due to the lack of liquidity on the DEX).
However, DeFi’s XFai project (XFIT) has a solution. Its DEX Liquidity Oracle (DLO) encourages and provides one-way liquidity for tokens on the DEX, while graphically representing this liquidity and creating a synthetic curve that synchronizes DEX price and liquidity on the circuit to simulate CEX-like trading.
The money collected from token holders is then balanced by XFai with a few stablecoins that are then fed into DEX, creating an optimized trading ecosystem with minimal slippage. In return, lenders can receive a higher annual percentage yield (APR).
Since users only deposit one token, they are only exposed to fluctuations in the price of that token (rather than the two-way exposure of providing cash on exchanges like Uniswap).
DLO also offers features such as anti-slippage – where the purchase price is as close as possible to the sale price – and low commissions by creating an efficient intra-chain market.
DOL Partnership Program
Last week, XFai announced the launch of its DLO partner program. This initiative seeks to leverage DLO’s unique value proposition to invite small and mid-sized tokens into the DeFi space, while offering project and token holders participation in one-way liquidity provision.
According to the Communication, even before the LGE more than 50 projects were identified as potential DLO partners and more than 10 projects joined the DLO partnership programme. Individual partnerships will be announced and highlighted in the coming days.
The partnership with DLO not only benefits the token partner and its community, but also XFIT holders. The unique capabilities of the XFai team allow DLO to be a revenue-generating model, but not at the expense of DLO partners or token holders.
Achieving a zero rate of income allows XFai to use the profits from its instruments, such as DLOs, for a strategy of buying and selling XFIT, resulting in a steady and sustained increase in price pressure for XFIT and an increase in the liquidity of XFIT pools.
Meanwhile, the project is already underway. The team has already raised over $5 million. XFai aims to save its users more than $4 million a month with its innovative DLO.
Denial: Takes a financial position in XFai. had the opportunity to participate in the private sale of XFai in exchange for news, project analysis and other coverage. was not paid for this article.
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Published in: Ethereum, DeFi
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