On the latest DMM, dynamic fees would increase capital performance.
Exchange that is decentralised In what it says is a global first, Kyber has introduced a Dynamic Market Maker, or DMM.
The new platform, which was unveiled on April 5, is intended to optimise fees and provide liquidity suppliers with incredibly high capital performance.
The fee generation framework is one of the main distinctions between Kyber’s latest platform and traditional Automated Market Makers, or AMMs. Unlike sites like Uniswap, which charge a fixed trading rate of 0.3 percent, the current DEX can measure fees continuously, rising during periods of high volatility and demand and declining during times of low volatility and demand. This allows merchants to take advantage of lower-cost trading opportunities, the resource savings for LPs and the network.
Kyber Network is an on-chain liquidity protocol with a DEX called KyberSwap that allows users to exchange crypto assets without the need for a central order book or an operator. The latest Uniswap interface served as a source of inspiration for the new DMM.
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 retreated over the past 24 hours dropping 5.7% to $3.13 according to Coingecko.
The latest DMM also has a “programmable pricing curve,” which helps liquidity pool developers to adjust pricing depending on the essence of the relationship between the two tokens with a “amplification element.”
To put it simply, tokens with a smaller divergence from their values, such as stablecoins, will have a higher amplification factor, allowing liquidity to rise without the need for more tokens throughout the pool. These features are all part of the Uniswap v3 update, which seeks to increase capital performance by improving the bonding curve.
Pool developers can set their own AMP factor, which increases variance based on the form of tokens in the pool — secure tokens will have a higher factor, and volatile tokens would have a lower factor.
“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!”
According to the release, the code has been thoroughly checked and audited several times by both the internal staff and external auditors, with no critical problems discovered. The final audit will be published shortly, but the protocol is still in beta, according to the statement.
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