Kyber Network presented on Monday, April 12, through its Twitter account, the beta version of the main network of the Kyber Dynamic Market Maker (DMM) protocol. The company explained that DMM is “a next-generation AMM designed to optimize rates and enable extremely high capital efficiency for liquidity providers”.
“After months of extensive research, we are very excited to present the mainnet beta version of the long-awaited Kyber Dynamic Market Maker (DMM) protocol! As of today, any liquidity provider can make optimal use of inactive tokens by adding them to Kyber DMM pools, while any recipient (eg Dapp, aggregator or end user) can access this liquidity”, he told through an article published on the Medium platform.
The company explained that Kyber DMM is a “novelty” liquidity protocol specially designed for retail liquidity providers and token teams, and it is the first of many new protocols to be launched in the Kyber 3.0 liquidity hub.
In his view, this launch marks a new era for DeFi, where “the contribution of open and permissionless liquidity is combined with extremely high efficiency and capital flexibility for the first time”. And its advantages? The company indicated that they include:
• Amplified pools with extremely high capital efficiency, if not the highest possible, compared to AMMs.
• Less commercial slippage due to high capital efficiency.
• Dynamic rates to optimize the profitability of liquidity providers and reduce the impact of non-permanent losses.
• No centralized Oracle or third-party risks.
Kyber DMM beta version
The company commented that it took the popular AMM Uniswap as its inspiration, so users will find some operations “like the token exchange and the protocol analysis page very familiar”. Here are the differences highlighted by Kyber DMM:
For liquidity providers
1. Add liquidity to a common fund
You can add liquidity by first entering the ‘Pools’ tab before selecting the pair of tokens for which you want to add liquidity. The list of available groups for that pair will be displayed and each group has important information categorized by group, ratio, liquidity, volume, rate, AMP, 1Y F / L, My Liquidity, etc. If there are no groups available for that pair of tokens, you can create a new group.
2. Create a new group
Multiple groups with different AMPs can be created for the same token pair. To create a new group, click Create New Group. As a pool builder, you can customize your programmable price curve with a specific amplification factor (AMP) to create amplified pools that support highly capital-efficient liquidity contributions for any pair of tokens.
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The ratio of tokens you add will set the starting price for this pool, so be sure to add an appropriate ratio of tokens considering the market price of the token pair.
For merchants
Drawing liquidity from its pools, the Kyber DMM allows anyone to exchange tokens on the ‘Swap’ tab. Kyber DMM will automatically review all available liquidity pools and find the pool with the best price (which can also support the size of the trade). Traders may enjoy lower slippage due to much higher capital efficiency when trades go through amplified pools.
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