Kyber 3.0 is a development that will unlock the unlimited innovation potential of the Kyber Network and is the largest update to Kyber’s architecture since its inception.
Let’s take a closer look at the details of this update, which covers very important topics such as Architecture Refresh, New Dynamic MCC Protocol and Migration Proposal for KNC tokens.
Kyber Network recently announced its plans for Kyber 3.0, the largest update since the inception of the Kyber architecture, including the launch of a brand new liquidity protocol called the Kyber Dynamic Market Maker (DMM) and a proposed migration for the KNC (Kyber Network Crystal) token. announced.
With the realization of last year’s growth targets, Kyber 3.0, now the next step for Kyber Network, will enable Kyber to evolve from a single liquidity protocol to a network of various, purpose-built liquidity protocols tailored for different DeFi use cases.
The update to create a network of liquidity protocols will eliminate a number of pre-existing constraints (including high gas consumption) and allow Kyber to adapt quickly to DeFi trends; It will provide a number of new benefits to liquidity providers, developers, market makers and KNC holders while enabling them to drive their future innovations.
“Kyber 3.0 will allow to create value for the myriad possibilities in DeFi”
Kyber Network Co-Founder Loi Luu made the following statement on the subject:
“Kyber 3.0 will remove existing barriers to our further growth and allow Kyber to create value for countless possibilities in the DeFi space. Kyber will be a hub for liquidity innovation and growth, with the new Dynamic Market Maker (DMM) as the first major development for the field. KyberDAO’s ability to gain value from all innovations in the network will also be greatly strengthened. ”
With the Professional Liquidity Protocol for market makers and the Bridge Protocol for connecting external liquidity sources, Kyber 3.0 will launch Kyber DMM, DeFi’s first automated Dynamic Market Maker (DMM). This is a next generation AMM protocol that offers several significant advantages over established solutions and aims to address the two most critical issues in AMMs (eg Uniswap, Sushiswap) today, persistent loss and capital inefficiency.
Unlike the static nature of most liquidity models in the field, Kyber DMM is designed to react to token pairs and market conditions to optimize fees for liquidity providers and rates for buyers.
This new system is achieved by two simple but revolutionary mechanisms:
Dynamic Fees: Allows trading fees to be adjusted according to market conditions (high or low trading volume and price volatility) to reduce losses and maximize returns.
Programmable Pricing Curves: Liquidity pool creators have the flexibility to pre-customize the pricing curve for their pools, and those who contribute to liquidity can determine which pool to capitalize on. The market will determine the best parameters for different token pairs depending on their nature.
The Kyber DMM development will be completely open to everyone with an intuitive, user-friendly user interface, and any Dapp; The aggregator will allow the liquidity contribution for any token from any, as well as sources of liquidity by the end user and other buyers. Further adoption of Kyber DMM will potentially increase the fees collected by KyberDAO in the long run (and rewards for KNC holders who vote and do KNC staking).
To support the new Kyber 3.0 architecture and increase the overall value of the network, the team will be proposing to upgrade KyberDAO and KNC to a new token contract. The aim is to greatly increase the management power of the KNC token, create multiple service flows and support liquidity innovation. For example, KNC token holders can potentially vote to determine which new protocols will be supported and which growth opportunities will be funded through incentive mechanisms (such as liquidity mining for DMM).
The proposed KNC token migration and update will be discussed by the Kyber community, and the final offer will be voted on by KNC holders via kyber.org at a later date.
The Kyber 3.0 update, which is planned to be implemented in two phases called Katana and Kaizen, strengthens the Kyber Network as the foundation of liquidity innovation; It will form the basis for the continuous growth of user base, liquidity and volume. In the first Katana phase, Kyber DMM will be launched and an offer for the KyberDAO and KNC token upgrade will be made. The full completion of the Kyber 3.0 upgrade is expected in Q3.