Kyber is currently undergoing its Kyber 3.0 upgrade. Kyber 3.0 will transition Kyber from a single protocol into a liquidity hub of purpose-driven protocols that are catered to different DeFi use cases. This is the biggest change to Kyber’s architecture and token model since its inception and will be implemented over 2 phases — Katana and Kaizen.
As the first major addition to the new network, we have launched a brand new liquidity protocol called the Kyber DMM — DeFi’s first automated Dynamic Market Maker.
Kyber DMM is a next-generation AMM designed to maximize the use of capital by enabling extremely high capital efficiency and reacting to market conditions to optimise returns for liquidity providers.
Unlike the static nature of typical AMMs and other liquidity platforms in the space, the Kyber DMM protocol is designed to react to token pairs and market conditions to optimise fees for liquidity providers and rates for takers. This is achieved via two simple yet novel mechanisms: Amplified Liquidity Pools (via Programmable Price Curves) based on the nature of the token pairs and Dynamic Fees based on market conditions.
Amplified Liquidity PoolsLess tokens required for high liquidity Kyber DMM’s Programmable Price Curve enables liquidity pool creators to set a suitable price curve and create amplified pools in advance, achieving much higher capital efficiency for providers and better slippage for users compared to AMMs.
Dynamic FeesHigher earnings potential, reducing the impact of IL Trading fees are adjusted dynamically according to on-chain market conditions. In a volatile market (higher than usual volume), fees automatically increase to an optimal level, reducing the impact of impermanent loss. In periods of low volatility, fees decrease to encourage more trading and total fees collected.
Kyber DMM allows fully permissionless liquidity contribution from anyone and access to this liquidity by any taker (e.g. Dapp, aggregators, end users).
Kyber DMM Docs:
Learn how to use and build DeFi applications with the Kyber DMM protocol by viewing the documentation here.
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