Introducing mimo: Faster, Lower Cost, Cross-Chain DEX

:arrow_right: Official mimo website: https://mimo.finance

Introducing mimo: Fast, Low Cost, Cross-Chain DEX

Today we are proud to introduce mimo, a new cross-chain decentralized exchange (DEX) developed by CapitalMu, a fintech organization consisting of engineers, practitioners, and researchers from the National University of Singapore (NUS). Our vision for mimo is to empower innovative decentralized finance (DeFi) applications on IoTeX, which is the perfect blockchain for DeFi due to its speed (5-sec blocks with instant finality), low fees (almost-zero gas fees), and cross-chain flexibility (support of IoTeX & Ethereum assets).

This initial release of the mimo DEX focuses on peer-to-peer trading and community-managed liquidity pools. Compared to other DEXs, mimo is faster, cheaper, and more efficient thanks to CapitalMu’s research-backed automated liquidity protocol that synchronizes perfectly with the features of the IoTeX blockchain. Traders, arbitrageurs, and liquidity providers will enjoy fully decentralized trading with 5-second trade finality and almost-zero gas fees – no other DEX comes close!

Our long-term vision for mimo is to create an ecosystem of #DeFIoT products/services, which will be anchored to mimo’s automated liquidity protocol. In addition to the trading of cross-chain digital assets (e.g., IOTX/ETH) that is now available, mimo will be expanded to enable the tokenization and trading of IoT datasets/devices, asset-backed derivative products and more. As the canvas for unprecedented #DeFIoT business models, mimo will help to unlock the trillion-dollar IoT data market.

We are proud to launch mimo with the support of the IoTeX Foundation and welcome everyone to explore mimo and enjoy its unique benefits – we welcome any feedback to make mimo even better! In the rest of this blog, we explain the history of DEXs and how mimo is redefining the DEX landscape.

Demystifying Decentralized Exchanges

Decentralized exchanges (DEXs) emerged in 2014 as an alternative to centralized exchanges after the implosion of Mt. Gox, which handled ~70% of BTC transaction volume at its peak. Between 2011 and 2013, through a combination of thievery and fat fingering, 400,000 Bitcoin (about $450 million at the time) went missing. Mt. Gox’s irresponsibility morphed into full-fledged insolvency in early 2014 after numerous requests to withdraw Bitcoin went unanswered. As a result the market hemorrhaged, and confidence across the entire cryptocurrency industry was severely impacted.

Today, mainstream centralized exchanges operate with the utmost attention to their users’ funds and have secured insurance and introduced safeguards that Mt. Gox never did. However, it’s ironic that trustless and secure digital assets continue to trade mainly on centralized platforms that themselves lack transparency. This “centralized stewardship” model pales in comparison to the safety, transparency, and consistency of decentralized exchanges.

Decentralized exchanges execute trades with an auditable smart contract, allowing users to hold on to their digital assets until the time comes to trade. This is in contrast to the centralized model, which requires users to send their digital assets to a centralized exchange before issuing an IOU balance they can trade against.

Decentralized exchanges have come a long way since they were first introduced. Etherdelta rose to prominence after its founding in 2016 because it quickly listed ERC20 tokens that dominated the ICO era of 2017 and early 2018. Etherdelta copied much of the interface of centralized exchanges but did so by introducing inefficiencies into the mechanics of trading. Etherdelta’s primary hassle is waiting for Ethereum blockchain confirmations whenever one goes to execute a market order or sets or withdraws a limit order. This time delay is a nuisance for everyone, but it introduces an unthinkable bottleneck for algorithmic traders reliant on the instant settlement offered by centralized exchanges.

IDEX came to prominence in 2018 as a hybrid exchange. IDEX maintains two databases, taking orders centrally and then submitting them to the Ethereum blockchain for execution. This eliminates the problem of “front running” that is prevalent on Etherdelta, where traders pay high gas fees to have their trades jump ahead of trades that were posted earlier. However, IDEX’s centralized database defeats much of the purpose of decentralized exchanges in the first place.

Uniswap: A New DEX Dawn

Building on the concept of Etherdelta and IDEX, Uniswap was introduced in early 2018 and quietly ushered in a new paradigm for decentralized exchanges that currently facilitates hundreds of millions of USD-equivalent daily transaction volume. An impressive amount, but only a tiny fraction of the tens of billions of daily US dollar digital asset volume sloshing through centralized exchanges (much of which is cross-chain).

Uniswap eliminates the traditional order book that lists buy/sell offers in ascending and descending order and replaces it with a single liquidity pool that automatically incentivizes market-making. Traders can trade against a single price instead of a clunky order book and everyone can become a market maker. Market making consists of posting both sides of a given trading pair, and the pro-rata share of the trading fees are issued automatically. On centralized exchanges, professionals with in-depth technical experience dominate market-making, running automated logic against exchange APIs. Uniswap democratized market-making, putting anyone with digital assets on a level playing field.

mimo Goes Beyond Uniswap

Just as Uniswap built upon the learnings of Etherdelta and IDEX, mimo adopts the same philosophy as Uniswap but adds unique benefits that greatly expand the usability and capabilities of DEXs: cross-chain, lightning-fast execution, and low fees. We detail each benefit below.

:arrow_right: Cross-Chain

Unlike Uniswap and other DEXs that only support assets from one blockchain, mimo supports assets from multiple blockchains to facilitate cross-chain asset swaps. ioTube, a cross-chain bridge developed by IoTeX, underlies the cross-chain capabilities of mimo. For liquidity providers, mimo offers a return for anyone who deposits digital asset pairs (e.g., IOTX/ETH, IOTX/VITA) to liquidity pools. mimo currently supports both ERC20 & XRC20 assets and we plan to support new assets from more blockchains in the future.

:arrow_right: Lightning-fast Execution

Users of mimo are lavished with the benefit of the IoTeX blockchain’s 5-second blocks with instant finality and extremely high tolerance for transaction volumes. Stuck or missed trades due to a clogged blockchain are far less likely to happen on mimo. On the other hand, Uniswap and other Ethereum-based DEXs are now suffering from Ethereum bottlenecks in high transaction periods, causing some traders to miss trades or give up entirely. Never miss another trade opportunity and have peace of mind knowing your trades are finalized within 5 seconds with mimo!

:arrow_right: Low Fees

It’s no secret that Ethereum fees have skyrocketed to the point where sending a simple transfer can cost upwards of $20 in gas fees. This has wreaked havoc on DEXs, introducing a massive barrier to entry and disqualifying retail traders that cannot stomach these unreasonable fees. In other words, only “whales” that trade massive volumes per day can afford to utilize Ethereum-based DEXs. With mimo, any trader with any amount of cryptocurrency can seek refuge on mimo to enjoy gas fees that currently do not surpass a few cents.

What’s Next for mimo?

Now that we understand the individual benefits of mimo, what are the bigger-picture collective benefits? Cross-chain, lightning-fast transactions, and low fees actually unlock unique features and improve user experience in more than just the obvious ways. Arbitrageurs, or those that simultaneously trade assets offered at different prices on different exchanges to earn a profit, are much more efficient on mimo given the speed of transactions and very low fees. If crypto markets experience a period of rapid volatility, say where prices drop by 20% in a single hour, the prices on a non-mimo DEX where transactions take several minutes could result in a severe price divergence. With mimo, the potential for a price divergence is much lower, since arbitrageurs can step in and close the gap in mere seconds.

But mimo’s potential is not limited to digital asset trading. The proliferation of IoT will lead to an onslaught of device data whose value can be unlocked without sacrificing privacy. We envision mimo to be the foundation for buying and selling this valuable IoT data – the new primary input into the decentralized economy. We look forward to working alongside the IoTeX Foundation to make #DeFIoT a reality, and we are so excited to have you along for the ride.


Official mimo launch is coming September 22 SGT.

27 Likes

Unique opportunity to have mimo as cross-chain decentralized exchange (DEX), a decentralized finance application on IoTeX Network with rare benefits. :heavy_heart_exclamation:

3 Likes

The community has questions about the new DEX

“Based on the price movements of the deposited assets, the value of one’s pool tokens will fluctuate - as such, liquidity providers take on price risk and are compensated with fees.”

  • “price risk” - what is meant?
  • liquidity pool - is it distributed in the token that you contributed as liquidity? or in some other token
5 Likes

good news for $IOTX holder i always wait lambo from IOTX :slight_smile::slight_smile::slight_smile:

1 Like

Hello, thanks for the questions!

Price risk:
As liquidity provider, the 0.3% transaction fee is the reward. The more transactions, the more reward. The price of the token pair is defined by algorithm (more details here: https://docs.mimo.finance/the-formulas). There is still risk when the price moves toward one side so the liquidity pool can become more of one asset. This can be considered as a risk. This can happen when the pool is small. If the liquidity pool is large enough, the risk could be very small because of small price slippage.

Liquidity pool token:
Yes, the liquidity pool token (LP token for short) is your ownership of the LP. As LP goes larger, more token will be issued. If you use mimo, you don’t have to worry about the LP token. The dApp will handle it directly. You can always check how much you own in a LP via the mimo dApp.

6 Likes

Swap and lend/borrow are the two most critical protocols to support the flows of assets on a chain. Really glad to see mimoprotocol from CapitalMu team getting alive! One step closer to the vision of IoTeX!

7 Likes

I’m extremely excited for the launch of mimo. Mimo protocol will bring many benefits to IoTeX and IOTX token holders. :rocket::rocket::rocket: @Rese2

2 Likes

good news for $IOTX holder i always wait lambo from IOTX :slight_smile::slight_smile::slight_smile:
Twitter @artem09047091

1 Like

Mimo, A Dex with an Edge, Will definitely be a fun ride for all. Fast transaction with super low Tx fee. Earnestly waiting.
@R_emerald

4 Likes

I m really exited about this news , swap nd lend are the most critical protocol to support the flow of asset.
One step closer to the vision of #iotx .
[https://twitter.com/Akash8871Akash/status/1308020938005389313?s=19]
#IOTX#vita to the moon :rocket::heart_eyes:
@Daredevil8871

2 Likes

This is amazing event! Waiting for 22nd of September!!! :+1: :+1: :+1:

@Artanovskaya

3 Likes

Great work, congrats. I’m expecting to use your DEX

@JohnPaul86

2 Likes

We are all confident that this step will increase the demand for using of this new DEX

[https://twitter.com/PolatM8/status/1308052508791668736]

TG username: @Polato

2 Likes

Great news! I love this trend. It will definitely be something interesting.
@Victorion

2 Likes

Great DEX built on great blockchain will certainly meet the expectations of users. The much awaited transformation needed in DeFi. Really great!
@O_Rosy

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Great work behind mimo, I am very exciting about trading on mimo as soon, fast and low fees in a decentralized manner “don’t have private keys, not your crypto assets” basic rule. @percymc

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a very important job every day. you will succeed. tg @myloginregionora https://twitter.com/romanremi4/status/1308160012020219911

2 Likes

Deal in 5 seconds. An interesting thing. I want to try it already. Timing)
@manaudou

3 Likes

DeFIoT ha I love this slogan. Let’s try to understand that this is one of the best solutions.
@divaysing

3 Likes

Very impressive! My congrats to all IoTeX big team!


@SaleAccSF

2 Likes