The CIFI Decentralized Exchange (DEX) is an integral module within the Circularity Finance ecosystem, designed to provide users with a secure and user-friendly platform for trading digital assets. Understanding how the CIFI DEX operates is essential for users who want to engage with the various financial instruments and services it offers.

Adding and Removing Liquidity on CIFI DEX

Add Liquidity

The CIFI DEX allows users to add liquidity to various pools by depositing a pair of tokens. Here's how it works:

  1. Select Pair: Users choose the two tokens they want to supply to the liquidity pool. For example, XDC and another token such as CIFI or REFI.

  2. Deposit Amounts: Users enter the amount of each token they want to deposit. The DEX interface will typically display the minimum price for each token, ensuring users are aware of the exchange rate at which they are providing liquidity.

  3. Fee Tier: Liquidity providers are informed of the transaction fee tier, which is usually a percentage of each trade taken as a fee for providing liquidity.

  4. Confirming the Transaction: After reviewing the amounts and fees, users can add liquidity by confirming the transaction, which requires a wallet interaction.

Remove Liquidity

Similarly, users can remove their contributed liquidity from the pool:

  1. Users choose the liquidity pool from which they want to remove funds.

  2. They input the amount they wish to withdraw or select the option to remove all their liquidity.

  3. The expected amount to be returned in each token will be displayed.

  4. Users confirm the removal, and the equivalent tokens, minus any fees or slippage, are returned to their wallet.

Understanding the CIFI DEX Token Pairs

In the CIFI ecosystem, DEX pairs are crucial for enabling trades between different tokens. Each pair has a unique contract address, acting as an identifier for the liquidity pool. For example:

  • XDC / CIFI Pair: The liquidity pool for XDC and CIFI tokens has its own contract address where users can add or remove liquidity.

  • CIFI / REFI Pair: This pair allows users to trade between CIFI and REFI tokens, contributing to the depth and breadth of the market for these tokens.

  • REFI / WCO Pair: Serving users interested in environmental tokens, this pair provides a platform for trading between REFI tokens and tokens from the Green Cross UK Chapter, like WCO.

The Technical Documentation for CIFI DEX

For those reading the technical documentation of the CIFI DEX, it's important to note:

  • All liquidity pools are governed by smart contracts, which autonomously execute trades and manage liquidity.

  • Fees generated from trades within the liquidity pools are distributed to liquidity providers proportionally to their share in the pool.

  • The DEX operates on a Layer 2 solution, ensuring fast transaction speeds and low fees.

  • To participate in liquidity provision or trading, users must complete KYC verification, aligning with Circularity Finance's commitment to security and compliance.

The CIFI DEX is a testament to the power of decentralized finance, offering users autonomy over their trading activities while ensuring a secure and transparent environment. By providing detailed technical documentation, Circularity Finance ensures that all users, from novices to experienced traders, can confidently navigate and utilize the DEX to its full potential.

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