The decentralized finance space has continued to reach new heights as a result of constant innovation. The latest development comes from Kyber Network, a decentralized finance (DeFi) exchange that has partnered with Layer 2 aggregator Polygon to improve liquidity via a new rewards program.
Kyber Network announced its deployment on the Polygon network on June 30 in a blog post on June 16. Additionally, the network announced that it would launch its first liquidity mining campaign on Polygon and Ethereum, with an estimated $30 million in incentives.
The program, dubbed “Rainmaker,” is scheduled to begin on June 30 and will distribute incentives to eligible Kyber liquidity providers over a three-month period. The announcement states:
“The aim is to incentivize liquidity providers and developers to use Kyber DMM by providing high yield on eligible token pairs, and in the process enhance liquidity for both the Polygon and Ethereum DeFi ecosystems.”
Benefits for Both the Projects
The move will enable Polygon’s high-speed Layer 2 solution on Kyber’s dynamic market maker (DMM). The goal is to enhance liquidity for both platforms and increase overall exposure for the Polygon ecosystem.
“Liquidity is a crucial element in any DeFi ecosystem and we’re glad to work with Kyber Network to help enhance liquidity on Polygon through the Kyber DMM protocol,” Sandeep Nailwal, co-founder and COO at Polygon commented.
$30 million in Kyber Network Crystal (KNC) tokens and MATIC tokens will be put aside for liquidity providers, who will be compensated with LP tokens representing their part of the pool. These can then be staked in order to earn extra tokens and a share of trading fees.
Kyber and Polygon will allocate 2.5 million KNC tokens ($5 million) and 500,000 MATIC tokens, respectively, to six eligible Polygon amplification pools. Additionally, 12.6 million KNC tokens will be dispersed across selected Ethereum-based pools worth a total of $26 million based on current prices.
Kyber Network’s co-founder, Loi Luu, commented on this partnership:
“Through this partnership, Polygon’s vibrant ecosystem will gain access to the highly capital efficient and flexible Kyber DMM protocol, and we believe this will empower more liquidity providers, traders, and developers to effectively engage in the world of decentralized finance.”
Kyber now joins Curve Finance, Aave, mStable, RenVM, and 0x as some of Polygon’s recent deployments.