Dynamic fees will improve capital efficiency on the new DMM.
Decentralized exchange Kyber has launched a Dynamic Market Maker, or DMM, in what it claims is a world first.The new platform, which was announced on April 5, has been designed to optimize fees and enable extremely high capital efficiency for liquidity providers.One of the major differences between Kyber’s new platform and regular Automated Market Makers, or AMMs, is the fee generation system. While platforms such as Uniswap charge a fixed trading fee of 0.3%, the new DEX will calculate fees dynamically, increasing during times of high volatility and demand, and decreasing when markets are quiet. This encourages traders to take advantage of cheaper trade opportunities which improve capital efficiency for LPs and the platform. The system mimics the Uber-style surge pricing that increases prices when there is a lot of demand for rides, such as in bad weather or rush hour, and drops them when there is less demand and traffic levels have returned to normal.Kyber Network is an on-chain liquidity protocol that has a DEX called KyberSwap, which allows users to swap crypto assets without a central order book or operator. Much of the inspiration for the new DMM has been taken from the current Uniswap 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 retreated over the past 24 hours dropping 5.7% to $3.13 according to Coingecko.The new DMM also operates a “programmable …
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