Kyber Network (KNC) Unveils Highly Capital Efficient Dynamic Market-Making Protocol

One of the oldest decentralized exchange (DEX) protocol Kyber Network has unveiled the highly-anticipated dynamic market-making (DMM) protocol.

Kyber Network Unveils DMM

In a blog post published on April 5, on-chain liquidity protocol Kyber Network finally unveiled the mainnet beta release of the Kyber Dynamic Market Maker (DMM) protocol.

https://twitter.com/KyberNetwork/status/1379064382248787975

According to the announcement, liquidity providers (LPs) on the platform can now make optimal use of idle tokens by adding them to Kyber DMM pools. At the same time, any taker (dApp, aggregator, or end-user) will have uninterrupted access to this liquidity.

In essence, Kyber DMM is a novel liquidity protocol specifically designed for retail LPs and token teams. It is also the first of many new protocols slated to be launched on the Kyber 3.0 liquidity hub.

To capture the main propositions of the Kyber DMM, it combines permissionless liquidity contribution with “extremely high capital efficiency and flexibility.”

What does Kyber DMM Offer?

The Kyber DMM brings offers with a swathe of novel, robust, and innovative features to LPs to attract them to the established DeFi protocol.

In addition to the aforementioned, the Kyber DMM offers amplified pools with extremely high – if not the highest – capital efficiency compared to other AMMs in the DeFi landscape. Subsequently, high capital efficiency ensures lower trade slippage for LPs.

The new iteration of the protocol offers dynamic fees to optimize returns for liquidity providers and reduce the impact of impermanent loss. In addition, the DMM promises no-third party or centralized oracle risk.

Another interesting feature offered by the Kyber DMM is the Amplification Factor (AMP). The post reads in part:

“Higher AMP, higher capital efficiency within a specific price range. This means that given the same liquidity pool and trade size, Kyber DMM can provide much better liquidity and slippage compared to AMMs. Slippage can potentially be 100X better than AMMs for more stable pairs.”

Interested users can check out the Kyber DMM beta here.

Clearly, the competition among DEXes is heating up with the rising popularity of the DeFi landscape.

BTCManager recently reported that Uniswap v3 is slated to go live on May 5, 2021, with various improvements including concentrated liquidity, multiple fee tiers, and more.