The vault creates a DeFi 2.0 experience that streamlines liquidity providing processes
Domination Finance, a non-custodial, decentralized exchange for dominance trading, announced the launch of its liquidity vault as part of the industry’s broader move towards DeFi 2.0. The vault represents the first of its kind, allowing users to add USDC-collateralized liquidity to both long and short pools on the overall market dominance of Bitcoin, Ethereum, and Tether.
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While DeFi 1.0 was trademarked by simple liquidity mining programs, the emergence of DeFi 2.0 protocols across the board has led users to expect more from decentralized applications in terms of UI/UX and liquidity provision. DomFi’s new liquidity vault eliminates the guesswork from being a liquidity provider and instead provides users with the opportunity to easily earn yield while reducing impermanent loss risk.
“As DeFi 2.0 takes hold, users are expecting a better experience that allows for enhanced safety and easier entry into the DeFi space,” said co-founder Michal Cymbalisty. “Being able to add liquidity to both the long and short pools simultaneously was the evident first improvement we could make from our initial release.”
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Liquidity can be seamlessly provided with a single click, mitigating impermanent loss risk by providing liquidity to both sides of the trade in a single transaction. With each asset having its own vault, users are able to selectively provide liquidity to dominance pairs on either Ethereum or Polygon.
This is one of the first implementations which enables users to maintain net neutral exposure while providing liquidity on a widely used automated market maker such as Uniswap. The team also integrated a custom rebalancing feature which ensures the long and short token values are equivalent to the collateral required to mint. This ensures liquidity providers are not immediately exposed to impermanent loss risk via pool arbitrage opportunities.
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