Kyber Network, a decentralized exchange, has declared its Kyber 3.0 upgrade, introducing a Dynamic Market Maker (DMM). The Kyber Network describes the upgrade as the most notable change to Kyber since its inception, according to the announcement. Kyber 3.0 will include a new DeFi innovation recognized as a Dynamic Market Maker (DMM). The team believes that this will exclude the difficulties that famous decentralized trading platforms currently witness like low capital efficiency and high slippage. The Kyber team elucidates that the new upgrade will transform its existing platform from a single protocol into a liquidity protocols hub.
Kyber 3.0 will provide substantial amplification factors for pairs within several wrappers of the same asset, comparable to Curve. The team states this would concede a 100-fold enhancement to slippage. Other, less stable pairs such as Bitcoin to Ether would profit from a five-to-ten-fold development in capital adequacy. Kyber Network also represents DMM as an enhancement over AMMs (automated market-makers). Owing to the latent nature of popular AMMs, most participating liquidity providers have limited control over the pricing system provided to traders.
Kyber’s Dynamic Market Maker is capital efficient
Contrarily, Kyber’s DMM is capital efficient. It enables the dynamic fine-tuning of trading parameters for liquidity pools. The DMM will automatically modify fees for liquidity providers based on market conditions. This will limit impermanent damage that can transpire on AMMs such as Uniswap during price volatility. Kyber 3.0 will also make Kyber permissionless to a more considerable extent. Anyone can subscribe to liquidity by deploying tokens into several pools, and any dApp or end-user can source that liquidity.
Further, Kyber Network has revealed a proposal about KyberDAO and the project’s KNC token migration. If the proposal blooms to support Kyber’s 3.0 architecture, it will move the token to a new contract. This will develop various streams of token utility and append to the token’s governance power. The proposal will be voted on in the prospect by KNC token holders. The Kyber 3.0 upgrade will happen in two phases, Katana and Kaizen. However, the Kyber Network has not released a particular date, but the full transition may conclude by Q3 2021.
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