Mimo has launched PICO, a first-of-its-kind governance token for fairer asset distribution, greater decentralization, liquidity, enhanced staking, and farming rewards distribution. The IoTeX-powered peer-to-peer, multichain, decentralized exchange also enabled users to earn trading fees.
"The goal of the initial distribution of PICO is to encourage fair distribution and participation across DeFi participants while ensuring deep liquidity for protocols' tokens and classic LP liquidity pairs," said Mimo Co-Founder Dexter Lee.
Mimo's governance token and DAO aim to incentivize long-term investor commitment and Liquidity Pool stability. Furthermore, Lee added that it also responds to the exponential IoTeX ecosystem growth in 2021 that increased from a couple of dozen projects to over 150.
He explained that decentralized exchanges play a crucial role in securing the deep liquidity of tokens across chains. The yield incentive provided on DEXs successfully attracts LPs to deposit their assets in return for significant APR returns.
"With typical tokenomics proposed by many DEXes on the chains, the utility of LP tokens is limited and often leads to mercenary mining that affects long-term protocol development," Lee explained. "That is why Mimo has opted for the DAO model to empower its token holders with greater utility."
The Mimo governance token serves three purposes: pool reward voting, liquidity incentives, and protocol fee sharing, which means stakers can earn trading fees from the initial distribution of the governance token.
There are three typical token holders in the Mimo DEX ecosystem. They are projects that want their tokens to be listed and incentivized with greater liquidity. Also, for liquidity providers (LPs) who want to generate more yield with their LP tokens, and investors who wish to earn trading fees and potential benefits from governance.
Cutting edge AMM
Because of their state-of-the-art Automatic Market Maker (AMM) underlying protocol, Mimo offers breakneck transaction speeds and low-cost transaction fees. Mimo users pay less than a penny per transaction, and Lee explained that transactions are confirmed in under five seconds.
Mimo's vision has always been to empower next-gen DeFi products using IoTeX's lightning-fast speed, low-gas fees, and cross-chain capabilities.
Mimo is, by far, the most extensive liquidity provider — $40M total value locked VL — on IoTeX and serves as a decentralized exchange for powering IoTeX DeFi ecosystems.
"The beauty of a decentralized governance is the token right of all Mimo token holders to decide how the incentives distribute across liquidity pools," he added," said Larry Pang, IoTeX's Chief Business Development Officer.
Mercenary mining and selling pressure
Current DEX models face the issues of short-term mining that harm the longevity of DeFi ecosystems. Yield farmers frequently make deposits into liquidity pools only to pull them out within the first few days to maximize their rewards, explained Pang. When liquidity providers are presented with short-term incentivization, it leads to mercenary mining and selling pressure.
This short-term behavior causes less token utilization and hurts the sustainability of DeFi ecosystems, he added. Mimo is adopting a different approach by combining its current DEX model with Curve's veToken mechanics and a DAO structure to solve this problem.
Empowering liquidity for MachineFi dApps
Mimo will achieve long-term sustainability for the IoTeX ecosystem by empowering liquidity for MachineFi dApps. The dApps will have their tokens with unique utility, enabling users to, for example, receive tokens for real-world activities such as walk-to-earn, drive-to-earn, and more.
Creating liquidity pools (LP) with Mimo's PICO token will increase liquidity depth while lowering slippage for traders. Many current liquidity providers are incentivized with high returns in a short period.
Pang said that because MachineFi dApps will have greater utilization, a model is needed for the new machine economy participants. This will foster a thriving machine economy where dApps on IoTeX receive stability and investors are incentivized to see the dApps flourish. They believe in the long-term success of such projects while still receiving benefits and rewards.
Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.
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