After approval by KIP-9 KyberDAO announced today that the Kyber crypto liquidity platform will deploy its new Kyber DMM (Dynamic Market Maker) protocol on the Polygon network on June 30th.
This announcement by Kyber coincides with the launch of “Rainmaker” – Kyber’s first liquidity mining program on Polygon and Ethereum; with an estimated $ 30 million in rewards.
Scaling with polygon
Polygon, formerly Matic Network, is a platform for scaling and infrastructure development of Ethereum. Polygon’s scaling solution is designed for DeFi users. with lower gas costs and fast block processing times.
Kyber + Polygon to improve DeFi liquidity
Designed as a capital efficient and flexible liquidity protocol; Kyber DMM will serve Polygon’s ecosystem of DApps and DeFi use cases.
Kyber DMM’s goal is to enable liquidity providers to maximize their capital. In addition, using Kyber DMM on Polygon enables a cost effective user experience during trading and liquidity provisioning.
Also with the deployment of Kyber DMM on Polygon; part of the trading fees generated goes to KyberDAO. This complements the existing deployment of the Kyber DMM protocol on Ethereum.
“Liquidity is a critical element in any DeFi ecosystem. We are excited to be working with Kyber to improve liquidity on Polygon through the Kyber DMM protocol! “
– Sandeep Nailwal, Co-Founder and COO of Polygon
Rainmaker’s new liquidity mining program
Beginning June 30th, Kyber’s new Rainmaker liquidity mining program will distribute a total of an estimated $ 30 million in rewards to eligible Kyber DMM Liquidity Providers (LPs) over a period of 3 months.
The goal is to motivate liquidity providers and developers to use Kyber DMM by offering high returns on eligible token pairs. At the same time, it will improve liquidity for both the Polygon and Ethereum DeFi ecosystems.
Liquidity providers receive DMM LP tokens (which represent their share of the liquidity pool) which they can use in the permitted liquidity mining pools for additional KNC or MATIC rewards (the governance tokens from Kyber and Polygon) on top of the protocol fees during the program period.
1. Liquidity mining on polygons
The polygon phase of the program lasts 2 months. Kyber and Polygon will distribute 2.52 million KNC tokens (~ 5 million US dollars) and MATIC tokens worth 500,000 US dollars across six eligible amplified pools:
- USDT-USDC (AMP = 200)
- USDC-ETH (AMP = 1.6)
- USDC-DAI (AMP = 200)
- MATIC-DAI (AMP = 1.5)
- KNC-ETH (AMP = 1.9)
- KNC-MATIC (AMP = 1.7)
KNC and MATIC Rewards can be used to add liquidity to the KNC or MATIC pools to earn even more. In addition, KNC can be used at KyberDAO to participate in the management of Kyber and to earn voting rewards.
2. Liquidity mining on Ethereum
The Ethereum phase of the Rainmaker program will last three months and KNC 12.6 million (~ $ 25 million) in rewards will be distributed across five eligible pools of increased liquidity:
- USDT-USDC (AMP = 200)
- USDT-ETH (AMP = 1.5)
- USDT-WBTC (AMP = 1.5)
- WBTC-ETH (AMP = 2)
- KNC-ETH (AMP = 1.9)
Benefits of Kyber DMM
In addition to receiving additional KNC and MATIC returns, Kyber DMM liquidity providers enjoy a variety of benefits that are not available with typical AMMs:
- Reinforced pools: LPs save the flexibility of selecting reinforced pools of liquidity that will greatly improve capital efficiency and help reduce trading slippage. With the same pool and the same trade size, stable token pairs with little variability in the price range (e.g. USDC / USDT) can be up to 100-200x better than other platforms. Liquidity providers can offer better prices and earn more fees with less capital.
- Dynamic fees: Protocol fees are dynamically adjusted based on market conditions to maximize returns and reduce the impact of temporary losses on LPs; with automatically accruing pool fees.
- Completely permission-free: Anyone can add liquidity to the Kyber DMM pools; while any DApp, aggregator or end user can access this liquidity. Kyber DMM is already integrated in 1inch and Matcha.
- No third party oracles: Not susceptible to external oracle risks.
- Security conscious: Kyber DMM’s code base has been checked by his team and external auditors such as Chain Security without any critical issues being identified. It’s open source too Github for community review. Kyber DMM is also backed up to $ 20 million by decentralized insurance provider Unslashed Finance.
Invitation to DeFi builders and liquidity providers
The Kyber team believes that the partnership with Polygon and the 30M
“This partnership gives Polygon’s dynamic ecosystem access to the highly capital efficient and flexible Kyber DMM protocol. And we believe this will enable more liquidity providers, traders and developers to get involved effectively in the world of decentralized finance. “
– Loi Luu, co-founder of Kyber Network
For developers looking to build with Kyber DMM, please visit Kyber’s Developers documentation.