Automated market maker MonoX has reportedly disclosed details regarding a debut fundraising round of $5 million with participation of different venture entities across the sector. 

Specifically, the financial support from the funding round – with Axia8 Ventures, Animoca Brands, Divergence Ventures and others taking part in – will reportedly be channeled towards achieving the goals in bringing down the capital and liquidity prerequisites for initiatives in one of the most up-and-running fields of crypto – DeFi – providing swap, lending, borrowing and derivative capabilities across decentralized exchanges (DEXes).

The protocol will reportedly make this possible via rolling out a single-sided liquidity model. Despite the idea not having revolutionary value for liquidity pools, it still looks to cater to the development of the DeFi ecosystem. 

In nominal traditional DEXes like Uniswap, a pair of tokens is mandatory for industry initiatives to design a “liquidity pair”, presenting further blockage, capital-wise, for entering. 

With the single-sided liquidity model, initiatives will reportedly need to offer their native tokens only. As such, they can introduce an increased amount of liquidity to the market.

“With a lot of innovation in the DeFi space, over-collateralization has become an increasingly big problem. We will use the funding to grow the team, further develop and build our community in new flourishing DeFi ecosystems like Solana.” Founder and CEO of MonoX, Ruyi Ren, reportedly offered his perspective regarding the potential effect of the funding. 

As soon as a DeFi initiative makes contributions of its native token, the MonoX-backed stablecoin vCASH will act as the second token to complete the liquidity pair. With a peg ratio of 1:1 to the US dollars, vCASH has a target of bringing down trading fees, which is usually visible across the transactions of traditional automated market makers (AMM).