Huobi, Coinbase and Dragonfly Invest in CoFiX, a Decentralized Exchange

Several cryptocurrency companies invested $500,000 in CoFiX, a decentralized exchange (DEX) that uses a ‘more accurate’ alternative price oracle. Investors include Dragonfly Capital, Coinbase’s venture arm, and Huobi DeFi Labs, CoinDesk reports.

CoFiX developers say they have solved a problem affecting many existing DEXes, including Uniswap and Compound. It concerns the divergence between the price that oracles obtain from centralized exchanges and the actual market price at which trading occurs during price discovery and liquidity pool rebalancing.

At CoFiX, data is based on a pricing mechanism derived from the NEST decentralized oracle and a DEX risk-assessment model.

In the protocol’s white paper, it states that miners receive compensation in NEST tokens for paying fees and providing price information. Validators profit from the difference between quotes and the market value of assets.

“CoFiX is paving a new path in DeFi with an innovative solution that will attract institutional traders and market makers to the sector,” said Huobi’s Chief Investment Officer Charline Wu.

The funds will be allocated by the CoFiX team to protocol auditing and project development. The official release is planned for late October 2020.

In September, the combined turnover of decentralized exchanges stood at about $23.5 billion.

Follow ForkLog news on Facebook!