Decentralized Exchange Kyber has launched a Dynamic Market Maker, or DMM, in what it claims to be a world first.
The new platform, announced on April 5, was designed to optimize fees and enable extremely high capital efficiency for liquidity providers.
One of the main differences between Kyber’s new platform and regular Automated Market Makers, or AMMs, is the fee generation system. While platforms like Uniswap charge a fixed 0.3% trading fee, the new DEX will calculate fees dynamically, increasing during times of high volatility and demand, and decreasing when markets are calm. This encourages traders to take advantage of cheaper trading opportunities that improve capital efficiency for LPs and the platform.
The system mimics Uber-style peak prices that raise prices when there is a lot of demand for rides, such as bad weather or at peak times, and abandons them when there is less demand and levels. traffic returned to normal.
Kyber Network is a DEX-enabled on-chain liquidity protocol called KyberSwap, which allows users to trade crypto assets without a backlog or central operator. Much of the inspiration for the new digital multimeter was taken from Uniswap’s current interface.
According to the DMM Dashboard, liquidity on the platform is currently $ 20.5 million with a daily volume of $ 490,000. Kyber’s native token, KNC, has fallen in the past 24 hours, falling 5.7% to $ 3.13 according to Coingecko.
The new DMM also exploits a “programmable price curve” which allows liquidity pool makers to customize prices through an “amplification factor” based on the nature of the relationship between the two tokens.
In essence, tokens that have a smaller spread over their price, such as stablecoins, can have a higher amplification factor, allowing liquidity to increase without the need for more tokens in. the pool. These features have also been included in the Uniswap v3 upgrade which also aims to improve capital efficiency by optimizing the link curve.
Pool builders can set their own AMP factor, which increases liquidity depending on the type of tokens in the pool – stable tokens may have a higher factor, while more volatile ones will be set lower.
“This means that, given the same liquidity pool and the same transaction size, Kyber DMM can provide much better liquidity and slippage compared to AMMs. Slippage can potentially be 100 times better than AMMs for more stable pairs! “
The announcement added that the code has been fully reviewed and audited several times by the internal team and external auditors without any critical issues being detected. He said the full audit will be released soon, but added that the protocol is still in beta.