MDEX Continues Strong Performance

The DeFi ecosystem has continued to improve in terms of products and community support over its first year of operation.

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December 12, 2021
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DeFi On the Rise

Decentralized Finance (DeFi is considered to be the first large-scale application of blockchain technology and has become a general theme in some of the most popular crypto sectors such as Non-Fungible Tokens (NFTs) and GameFi. 

Decentralized Exchanges (DEXes) are the most visited blockchain services because they form the core of DeFi. They are the central nodes where users and funds gather to perform transactions. However, because the needs of users are gradually diversifying and multi-chain competition is testing the limits of current DEXes in the market, a focus on simply satisfying trading necessities is no longer enough to acquire and retain users in this fierce industry. 

MDEX has only operated for about a year within this market, but it has managed to reach leading levels of Total Value Locked (TVL) compared with its competitors. It has brought efficient and high-yield product experience to both market makers and investment traders. More importantly, the reason behind this rise, is the team's central focus on product quality and development. Under the governance of the MDEX Decentralized Autonomous Organization (DAO), the team's product development has been fast and orderly with innovations in multi-chain deployments, derivatives and NFT markets . This continuous development is advancing MDEX on the path towards a complete DeFi ecosystem within the world of blockchain.


MDEX Ensures Higher Returns for Liquidity Providers

On December 2nd, the MDEX platform experienced another halving. The mining output for the platform’s token MDX was halved again, from 40 MDX per block for dual chains (Binance Smart Chain & HECO) to 20 MDX per block. Furthermore, the MDEX community voted to approve a proposal to adjust the platform’s fee distribution. Currently, the platform charges a 0.3% fee for all transactions. Under the new proposal, 0.2% will be given to all Liquidity Pool (LP) providers (including those who do not belong to the platform’s liquidity mining whitelist), 0.07% is used for the repurchasing and burning of MDX and XMDX and finally 0.03% is used for boardroom rewards. Consequently, this new distribution plan gives more incentives for users to become LP providers. 

More importantly, this kind of decision is not uncommon within the MDEX community, which shows the strong consensus, confidence and determination our users have to support and invest in our project's growth.

MDEX currently has more than $1.4 billion in TVL and the combined average daily trading volume of both chains is between $200-400 million. This means that due to the new scheme, liquidity providers are entitled to a share of the daily $400-800,000 income from transaction fees.


MDEX Brings More Prosperity Through Liquidity 

Market-making revenue is the primary income for liquidity providers besides the benefits from liquidity mining. It is also what drives LPs. 

The opposite is true for trading in some popular emerging tokens. The latest data, shown below, point to a higher LP market-making revenue rate on MDEX than on PancakeSwap for the same pairs.

 

Notwithstanding these results, these data comparisons also highlight the areas where MDEX can improve. In a situation where DeFi sectors are starting to intersect each other, the importance of liquidity has become more and more prominent.

This recognition supports the recent adjustment of MDEX to allocate more revenue from fees to LPs. Issues like slippage and depth directly influence the user experience. Higher liquidity allows MDEX to have a better performance when solving these common challenges confronted by DEXes; in terms of transaction, it constitutes MDEX’s core strength as all other functions and services are based on the sufficiency of liquidity. 

These advantages can already be found in MDEX's high yield on emerging popular tokens, which will attract starting quality projects to gather on MDEX. Such a siphon effect could make MDEX become the preferred trading venue for popular projects, creating a virtuous loop of projects empowering each other and attracting more users to the platform. It is only a matter of time before we will see these effects stemming from our recent fee revenue distribution plan. 

MDEX’s vision and goal to become a comprehensive DeFi ecosystem in the future, is predicated on access to liquidity. Our adjustment of the fee allocation can be seen as a major declaration and a strong signal towards the crypto industry.

Plans Keep Going

In the long run, MDEX will usher in new opportunities for starting projects and uses. MDEX will continue to work with more partners to promote the prosperity and development of its ecology, which will inevitably lead to better and durable returns for MDX holders. These moves in combination with the deflationary model of halving and burning are part of a long-term process that will set the future value of MDX.

MDEX uses the "dual mining incentive" of liquidity mining and transaction mining to maximize the rewards for participants. Together with the fee-based repurchase and burning mechanism, they create a virtuous loop for value capture within a closed ecology. Moreover, MDEX is well known for its excellent user experience and protection of their rights. Similarly, the adjustment of the fee’s distribution was decided under the same ‘user first’ operating philosophy, which the MDEX community has been carrying outwards since its conception.

The effectiveness of this approach has already been demonstrated in practice and in data. It can be said that with current ambitions, visions and promising actions in the pipeline, MDEX has an exciting future ahead.

For more information about MDEX, visit the following links:

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