~$30M in rewards to liquidity providers to enhance liquidity on both Ethereum and Polygon
Following the approval of KIP-9 by KyberDAO, we are excited to share that the Kyber DMM (Dynamic Market Maker), a new protocol in Kyber’s liquidity hub, will be deployed on the Polygon network on 30th June.
This is coupled with the launch of ‘Rainmaker’ — our very first liquidity mining program on Polygon and Ethereum with an estimated $30M in rewards!
What is Polygon?
Polygon is a popular and easy-to-use platform for Ethereum scaling and infrastructure development. More than $6.5 billion worth of Ether and Ethereum-based tokens have been locked within smart contracts on Polygon, and over 356 projects are building on Polygon’s ecosystem. Polygon presents an attractive Ethereum scaling solution for DeFi users, with lower gas costs and faster block processing time compared to Ethereum.
Partnering with Polygon to Enhance DeFi Liquidity
Kyber will be working closely with the Polygon team to ensure a successful Kyber DMM deployment, enhance liquidity for DeFi, and bring more users, developers, and Dapps to Polygon.
Being an extremely capital efficient and flexible liquidity protocol, Kyber DMM can cater to Polygon’s diverse ecosystem of Dapps and DeFi use cases, and enable liquidity providers to maximise the use of their capital. In addition, using Kyber DMM on Polygon allows for a cost efficient user experience during trading and liquidity provision.
With the deployment of Kyber DMM on Polygon, a portion of trading fees generated will go to KyberDAO, complementing the existing Kyber DMM protocol deployment on Ethereum.
“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, Polygon
Rainmaker Liquidity Mining Program
Beginning on 30th June, the Rainmaker program will distribute an estimated total of $30M in rewards over the course of 3 months to eligible Kyber DMM liquidity providers (LPs). 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.
Liquidity providers receive DMM LP tokens (representing their liquidity pool share) which they can stake in the eligible liquidity mining pools to earn additional KNC or MATIC (Kyber’s and Polygon’s governance tokens) rewards on top of protocol fees during the program period.
1. Liquidity Mining on Polygon
The Polygon phase of the program will run for 2 months. As part of our partnership, Kyber and Polygon will be distributing 2.52M KNC tokens (~$5M) and $500,000 worth of MATIC tokens respectively across six eligible amplified pools:
- USDT-USDC (AMP=200)
- USDC-ETH (AMP=1.6)
- USDC-DAI (AMP=200)
- MATIC-DAI (AMP=1.5)
- KNC-ETH (AMP=1.9)
- KNC-MATIC (AMP=1.7)
KNC and MATIC rewards can be used to add liquidity to the KNC or MATIC pools to earn even more rewards. In addition, KNC can be staked on KyberDAO to participate in Kyber’s governance and earn voting rewards.
2. Liquidity Mining on Ethereum
The Ethereum phase of the Rainmaker program will run for 3 months and 12.6M KNC (~$25M) in rewards will be distributed across five eligible amplified liquidity pools:
- USDT-USDC (AMP=200)
- USDT-ETH (AMP=1.5)
- USDT-WBTC (AMP=1.5)
- WBTC-ETH (AMP=2)
- KNC-ETH (AMP=1.9)
Why Kyber DMM?
Besides receiving additional KNC and MATIC yield, Kyber DMM liquidity providers enjoy a host of important benefits that are not available on typical AMMs.
- Amplified Pools: Liquidity providers have the flexibility to select amplified liquidity pools that greatly improve capital efficiency and help reduce trade slippage. With the same pool and trade size, stable token pairs with low variability in the price range (e.g. USDC/USDT) can be up to 100–200 times better compared to other platforms. Liquidity providers can provide better prices and earn more fees with less capital.
- Dynamic Fees: Protocol fees are adjusted dynamically based on market conditions to maximise returns and reduce the impact of impermanent loss for liquidity providers, with fees automatically accruing in the pool.
- Fully permissionless: Anyone can add liquidity to Kyber DMM pools; while any Dapp, aggregator, or end user can access this liquidity. Kyber DMM is already integrated with 1inch and Matcha, with more aggregators and Dapps on the way.
- No 3rd-party oracles: Not vulnerable to external oracle risks.
- Committed to security: Kyber DMM’s codebase has been audited by both the team and external auditors such as Chain Security with no critical issues found, and is open source on Github for community review. Kyber DMM is also covered up to $20 Million by decentralized insurance provider Unslashed Finance.
An Invitation to DeFi Builders and Liquidity Providers
Kyber’s vision is to deliver a sustainable liquidity infrastructure for DeFi, and this also extends to fast-growing ecosystems such as Polygon. This Polygon partnership and the $30M Rainmaker liquidity mining program will help showcase the powerful benefits of the Kyber DMM protocol and is an important step towards greatly boosting liquidity for DeFi, as well as growing the number of users, developers, and Dapps in the Kyber and Polygon ecosystems.
“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.”
– Loi Luu, Co-Founder, Kyber Network
We welcome all DeFi participants to add liquidity on the Kyber DMM to enjoy dynamic fees, higher capital efficiency, and additional KNC and MATIC yield.
More information on how to bridge assets to Polygon and participate in the Rainmaker program will be provided around the 30th of June.
Onward, Kyber Network!
Polygon is the first well-structured, easy-to-use platform for Ethereum scaling and infrastructure development. Its core component is Polygon SDK; a modular, flexible framework that supports building and connecting Secured Chains like Plasma, Optimistic Rollups, zkRollups, Validium etc and Standalone Chains like Polygon POS, designed for flexibility and independence. Polygon’s scaling solutions have seen widespread adoption with 400+ Dapps, ~200M txns and ~1.3M+ unique users.
To learn more about Polygon, please visit https://polygon.technology/
About Kyber Network
Kyber Network aims to deliver a sustainable liquidity infrastructure for DeFi. As a liquidity hub, Kyber connects liquidity from various protocols and sources to provide the best rates to takers such as Dapps, aggregators, DeFi platforms, and retail users.
Anyone can contribute liquidity to Kyber Network and Dapps can integrate different protocols depending on their liquidity needs. Using Kyber, developers can build innovative applications, including instant token swap services, ERC20 payment flows, and financial DApps — helping to build a world where any token is usable anywhere.
Kyber is powering more than 100 integrated projects and has facilitated over US$5 billion worth of transactions since its inception.
Kyber Partners with Polygon to Enhance DeFi Liquidity was originally published in Kyber Network on Medium, where people are continuing the conversation by highlighting and responding to this story.