Overview
Mute.io was one of the earliest DEXs on zkSync Era, launching alongside the chain's mainnet. The protocol offered standard AMM functionality plus a bond mechanism (inspired by OlympusDAO) for protocol-owned liquidity. In 2024, the project rebranded to Koi Finance, signaling a strategic refresh.
Despite being an early mover, Mute/Koi lost the zkSync DEX race to SyncSwap, which captured the dominant liquidity position. The rebrand to Koi was an attempt to reset perception and attract new users, but the competitive dynamics remain challenging.
Smart Contracts
Koi's contracts provide standard AMM pools with a twist — the bond mechanism allows users to purchase KOI tokens at a discount in exchange for LP tokens, building protocol-owned liquidity. This OlympusDAO-inspired mechanism was innovative but added complexity.
The concentrated liquidity features and aggregation routing have been added over time. Contract quality is adequate but the codebase has undergone multiple iterations through the rebrand.
Security
The protocol has been audited, and the bond mechanism adds complexity that requires careful security consideration. No major exploits reported. The rebrand and contract migrations add some transition risk.
Liquidity
Liquidity is significantly behind SyncSwap within the zkSync ecosystem. The bond mechanism was intended to build protocol-owned liquidity, but adoption has been modest. Available depth for trading is limited.
Adoption
Koi Finance is a secondary DEX on zkSync, handling a fraction of SyncSwap's volume. The rebrand has not significantly changed market dynamics. Users on zkSync default to SyncSwap, leaving Koi with the remainder.
Tokenomics
KOI (formerly MUTE) token powers the bond mechanism and governance. The token migration from MUTE to KOI added a fresh start. The bond mechanism creates a unique demand driver for KOI. However, the limited TVL and volume constrain fee revenue, making tokenomics sustainability uncertain.
Risk Factors
- Second-tier position: Losing the DEX race to SyncSwap limits growth
- Rebrand risk: Brand resets can confuse existing users and dilute recognition
- zkSync dependency: Chain's growth challenges affect all zkSync protocols
- Bond mechanism complexity: OlympusDAO-style bonds have shown mixed long-term results
- Limited liquidity: Thin pools limit trading quality
- Token migration: MUTE to KOI transition creates holder friction
Conclusion
Mute.io/Koi Finance is a functional zkSync DEX that lost the race for dominance to SyncSwap. The 3.8 score reflects working technology and interesting tokenomics, discounted by secondary market position, limited liquidity, and the challenges of the zkSync ecosystem overall.