Crypto swapping service Kyber Network has just introduced a DMM (Dynamic Market-Making) protocol into their system. The protocol’s main purpose is to increase the efficiency of finance in the Kyber network. This new protocol is fast and much more efficient than the previously adopted AMM protocol. Since the Kyber network is already on the top 10 list of the biggest trade volume-based decentralized exchange, the implementation of this new protocol might enable it to move up the list, beating others by significant margins. If the other exchanges don’t act up accordingly, this might prove to be doomsday for them.
CTO of Kyber Network, Victor Tran, stated to a media source that the protocol will not only provide better finance efficiency but will also help in creating much better stable pairs using the spillage technique.
DMM Protocol Features
The new Dynamic Market-Making protocol will help in the reduction of transaction fees and make sure that liquidity providers get most of the earnings. The fee will be adjusted according to different situations, and market fluctuations and pricing curves will also be adjusted accordingly by the use of complex algorithms which will drive the protocol.
Victor Tran from the Kyber network also stated that this new protocol would facilitate liquidity providers with the ability to adjust the price curves of any of the token pairs using a special amplification factor also known as ‘AMP.’ Whenever there is a change in token numbers in the pool, AMP will dynamically adjust and amplify the balance to match appropriately. Adding to that, Tran also said that if the trade size is equal to the pool size, it will result in much better liquidity yield and spillage, putting it in the spotlight in the market.
Furthermore, Tran explained about the fee, saying that there will be no static amount of fee as the fee will be adjusted accordingly, giving different market situations to show up, keeping the token pairs stable enough to work it out. The fee will be dynamic, meaning when the market is unstable, then the fee will rise in price and vice versa. Tran marked the protocol as a professional move, meaning better returns on trade and optimization of returns will be a piece of cake.
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