Dodo is a Proactive Market Maker DEX for Swaps and Liquidity

Dodo is a self-custody exchange - users keep wallet control - that prices liquidity with a Proactive Market Maker, a curve guided by an external market price. Its SmartTrade router compares on-chain venues, splits routes when useful, and settles token swaps through smart contracts on the selected network.

Swap Costs Across SmartTrade and Dodo Pools

0.1% is the SmartTrade route fee that Dodo charges on routed swaps, before pool-level fees, price impact, and network gas enter the final cost.

Pool-level charges are separate. Each pool exposes liquidity-provider and market-maker-treasury rates in its quote; public-pool fee revenue is allocated 80% to liquidity providers and 20% to the community treasury. Pool creators commonly choose among preset rates of 0.01%, 0.3%, and 1%, while the selected chain charges gas in its native asset. Price impact changes the quoted exchange rate; it is not a posted fee.

One worked example uses these hypothetical changing inputs: a 1,000 USDC fee base, a pool charge of 0.3% calculated on that base, network gas worth 2 USDC, and zero price impact. The fixed 0.1% route charge equals 1 USDC, while the pool charge equals 3 USDC. Adding the 2 USDC gas value produces 6 USDC of explicit cost. Under those stated assumptions, 994 USDC of value remains for the exchange output, which is then converted at the quoted rate.

Compare the minimum received amount after every route leg; a stronger displayed rate can still leave a smaller wallet balance after gas.

Starting a Self-Custody Swap on the Correct Chain

Seven widely used Dodo networks have fixed EVM chain IDs: Ethereum 1, BNB Chain 56, Polygon 137, Arbitrum One 42161, Optimism 10, Avalanche C-Chain 43114, and Base 8453.

A same-chain swap begins by connecting MetaMask, Coinbase Wallet, or a WalletConnect-compatible wallet, then matching the wallet network to the assets. Search by contract address when symbols repeat, enter the amount, and read the route, minimum output, price impact, and gas estimate before signing. The first ERC-20 trade commonly involves two on-chain actions: one approval and one swap. Later trades need only the swap while sufficient allowance remains. Native gas assets differ - ETH pays on Ethereum, Arbitrum One, Optimism, and Base; BNB pays on BNB Chain; POL and AVAX pay on their respective networks.

The DODO governance token is optional for trading. Liquidity and gas determine route execution, and a Base trade needs ETH on chain ID 8453.

Liquidity Pools for Trading Pairs, Pegged Assets, and Token Launches

Four Dodo pool models cover distinct inventory jobs: Standard, Pegged, Single-Token, and Private, with the pool contract translating deposits into executable quotes.

Further detail lives in Dodo working with guide requirements. Standard pools accept two-sided inventory. Pegged pools concentrate depth around an anchored exchange rate, which suits pairs such as USDC and USDT when their target values align. Single-Token pools begin with one asset on the sell side, letting a project form an initial market without matching quote inventory. Private pools reserve deposits for their creator and allow active parameter changes. Each design produces fees for liquidity providers, but inventory shifts and guide-price changes alter the value of their holdings.

Four Pool Configurations

Open Liquidity Models

Three open models separate familiar two-token liquidity from specialized inventory. Standard needs two token types; Pegged fixes its parameters after creation; Single-Token starts with one token type. Pool creation presents three trading-fee choices - 0.01%, 0.3%, and 1% - plus slippage coefficients of 0.01, 0.5, or 1 for models that expose that control. A coefficient of 1 produces the AMM-like end of the PMM curve.

Private Market Making

One Private Pool admits liquidity only from its creator, who can update its guide price, fee, slippage factor, and inventory. That control serves active market making rather than passive shared deposits.

Crowdpooling connects distribution to market creation. A campaign places no more than 50% of deposited project tokens in the sale, while the remainder supports the resulting pool; its pool fee defaults to 0.3%, and a linear release period of 0 makes the full allocation claimable at the initial claim. These controls turn token issuance and opening liquidity into one settlement flow.

Where Do Price Impact and Execution Failures Come From?

20% is the interface's Expert Mode boundary, while Dodo price impact and execution failures come from reserve depth, changing state, allowances, gas pricing, and deadlines.

Price impact comes from trade size relative to usable reserves along every route leg. Slippage tolerance sets the minimum acceptable output between quoting and confirmation. If the state moves below that minimum, the transaction reverts, and the network still charges gas for computation already performed. A deadline adds a separate time condition. Low gas pricing can leave a transaction pending until that deadline passes. Indirect routing may improve output through an intermediate token, yet each added pool introduces another contract call and another reserve that can change.

Approval is a separate failure state: an ERC-20 allowance below the input amount requires another approval before the swap can move tokens.

Liquidity providers face inventory exposure. PMM concentrates inventory around a guide price, so delayed guidance or rapid market movement changes which asset accumulates. A Pegged Pool also relies on its chosen anchor remaining meaningful. Standard Pools add a concrete dependency by using Chainlink for the guide price.

Which DEX Model Fits the Trade?

Four established alternatives cover distinct choices: Uniswap for direct pools, Curve for similarly priced assets, 1inch for aggregation, and CoW Protocol for intent-based execution.

Uniswap v2 exposes the constant-product model, while Uniswap v3 lets liquidity providers choose concentrated price ranges. Curve specializes in low-slippage exchange among similarly priced assets. 1inch resembles Dodo X at the routing layer because both compare multiple venues instead of relying on one pool. CoW Protocol accepts signed trade intents and seeks settlement through batch competition. Dodo is differentiated when PMM inventory control, native pools, and aggregated routes matter together. For a single swap, compare final quoted output, gas, route complexity, and allowance requirements on the same chain.

A direct Uniswap pool offers transparent single-venue execution; a 1inch or Dodo route can split liquidity for a stronger aggregate quote.

Stablecoin trades make Curve's specialized invariant relevant, while CoW Protocol changes execution timing through intents. PMM has a different dependency: its guide price and inventory state shape local depth. The deciding factor is route-specific, not token branding. An ETH-to-USDC swap on Arbitrum One can produce different net outputs across these four models at the same moment.

PMM Pricing and SmartTrade Routing Under the Hood

Two routing strategies - linear and split-order - sit above Dodo's PMM pools, while each PMM quote reacts to a guide price and the pool's inventory imbalance.

The PMM Price Curve

At k = 0, the PMM curve is flat; between 0 and 1 it concentrates liquidity around the guide price, and at k = 1 it matches the AMM-shaped boundary.

The compact expression P = iR separates the external guide price i from an inventory adjustment R. The model tracks four reference values - i, k, equilibrium base inventory B0, and equilibrium quote inventory Q0 - alongside current balances. When traders remove base tokens, the curve raises their marginal price. Incoming arbitrage then has an economic reason to restore the missing side. Concentrating depth near i lowers price impact near equilibrium, while thin inventory farther away makes large trades move the quote faster.

The SmartTrade Route

Linear routing sends the full amount through one path. Split-order routing divides it across venues or depths when the combined output improves, using DODO V2, Uniswap v3, Curve, Balancer, Aerodrome, and other integrated liquidity where available. The router limits each pair leg to no more than three pools, containing gas use and contract interactions. A path from ETH through USDT to USDC therefore combines two pair legs, and each leg can draw from up to three pools.

Together, those layers turn an ETH-to-USDC request into one executable route under the three-pool-per-leg cap.

Common questions