Kyber DMM liquidity mining is live: Earn KNC, MATIC rewards with Rainmaker
This article is provided by Kyber Network, original source
The first liquidity mining program, Rainmaker, of Kyber DMM is officially live! This is also the first deployment of Kyber DMM on the Polygon network.
Kyber Dynamic Market Maker (DMM) is the next-generation AMM protocol that maximizes capital efficiency and optimizes returns with advantages such as high capital efficiency and dynamic fees for liquidity providers. Currently in the testing phase, Kyber DMM has already processed over $120 million in trading volume, with a TVL of over $88 million, and total amplified liquidity exceeding $13 billion. These figures are comparable to TVL of typical AMMs.
Advertisement - Scroll down for more
Through the Rainmaker liquidity mining program, Kyber DMM will further enhance liquidity, showcase various important advantages to liquidity providers, and bring more DeFi participants and value to the Kyber and Polygon ecosystems.
The Rainmaker program went live on June 30 at 3:30 PM and will distribute approximately $25 million in rewards to eligible liquidity providers LP on Kyber DMM over a period of 3 months.
Table of Contents
Rainmaker: Important Details
Start Time
- Ethereum Block 12734250 and Polygon Block 16318000 at 3:30 PM on June 30th
Liquidity Mining Program Duration
- Duration on Ethereum: 600,000 blocks (3 months)
- Duration on Polygon: 2,400,000 blocks (2 months)
KNC Token Smart Contract Addresses
- On Ethereum: 0xdeFA4e8a7bcBA345F687a2f1456F5Edd9CE97202
- On Polygon: 0x1C954E8fe737F99f68Fa1CCda3e51ebDB291948C
How to Bridge Assets between Ethereum and Polygon Networks?
To transfer Ether or ERC20 token assets from Ethereum to Polygon, simply use the Polygon Bridge https://wallet.matic.network/bridge/.
If you are on the Kyber DMM on the Polygon Matic network, simply click the "Bridge Assets" button at the top of the page. Note that this button will not appear if you are on the Ethereum network.
The whole process is quick and easy. Read this guide by the Polygon team https://docs.matic.network/docs/develop/wallets/matic-web-wallet/web-wallet-v2-guide/ to learn how to use the bridge!
Switching from Ethereum to Polygon Network: On Kyber DMM, click the Ethereum button at the top to switch your network to Polygon Matic or directly change your network to "Matic" on your MetaMask.
How to Participate in Rainmaker?
Step 1: Add Liquidity
First, go to the "Pools" page. You need to connect your wallet (Metamask, Ledger, WalletConnect, Coinbase Wallet) and add liquidity by depositing the required tokens into eligible pools. In return, you will receive DMM LP tokens (representing your share of the liquidity pool) and start earning protocol fees for that pool.
You can view the pools you provided liquidity to on the "My Dashboard" option.
Note: If you want to view liquidity pools on the Polygon Matic network, switch to "Matic" on your Metamask first.
Eligible Liquidity Pools
Rainmaker pools eligible for liquidity mining have a 💧raindrop icon on the left side. These pools qualify for liquidity mining.
Liquidity Mining Activities:
A Rainmaker on Ethereum
Duration: 600,000 blocks (3 months)
Rewards: 12.6 million KNC (approximately $20 million) evenly distributed among five eligible liquidity pools.
Eligible Pools on Ethereum
B Rainmaker on Polygon
Duration: 2,400,000 blocks (2 months)
Rewards: 2.52 million KNC tokens (~$4 million) and 454,545 MATIC tokens rewards (~$520,000) allocated based on the following.
Eligible Pools on Polygon
*AMP = Amplification Factor. Amplified pools have higher capital efficiency. Higher AMPs have higher capital efficiency within the price range.
Step 2: Stake DMM LP Tokens and Start Receiving Liquidity Incentives
Next, go to the "Yield" page and stake your DMM LP tokens in the respective farming pool contracts. If this is your first time, you need to approve the tokens first. You can view the amount you've staked under "My Deposit."
The APY here refers to the annual percentage yield based on pool fees + rewards.
After successfully staking DMM LP tokens, you will receive KNC and MATIC in addition to protocol fees, depending on the pool's liquidity reward.
Providers who add liquidity to eligible pools and stake their DMM LP tokens will earn KNC or MATIC rewards over time, based on their share of total DMM LP tokens staked in the pool. Rewards are distributed linearly, with a fixed amount released per block. The longer you provide liquidity, the more rewards you earn. You can unstake your DMM LP tokens at any time.
The total rewards collected through adding liquidity and staking will also be displayed, allowing you to claim all rewards at once or choose to claim from individual pools.
You can unstake your DMM LP tokens and withdraw liquidity at any time without penalty to your rewards.
Important Note: Use the official Kyber DMM user interface to stake LP tokens. Directly transferring to liquidity mining pool addresses will result in loss of deposited tokens.
Step 3: Harvest Rewards and Claim
After receiving KNC or MATIC rewards, you must first harvest your rewards. When you harvest rewards, it activates a new 30-day vesting period.
The harvested rewards are initially locked and released linearly over 30 days, approximately 200,000 blocks at 12 – 15 seconds per block on Ethereum. This linear release mechanism is a critical governance safeguard and ensures a stronger incentive system for Kyber Network.
- Ethereum Lockup Duration (Linear Release): 200,000 blocks (30 days)
- Polygon Lockup Duration (Linear Release): 1,200,000 blocks (30 days)
Go to the "Vesting" tab to see how much KNC or MATIC rewards you've already claimed, locked, and unlocked from the start. You can also view your current and past vesting periods.
Depending on how many times you've claimed rewards, multiple vesting periods may run simultaneously. Note that each time you claim rewards, gas is required, so you may want to accumulate a certain amount of rewards before clicking to claim. You can view past transactions by clicking the "History" button.
Once unlocked, rewards can be claimed at any time. You can choose to claim all unlocked rewards at once or select rewards from specific vesting periods.
You can check the FAQs about Rainmaker here.
In summary, here is an infographic we've compiled outlining the Rainmaker liquidity mining program:
How Can KNC or MATIC Rewards Be Used?
KNC is a utility ERC20 token that plays a crucial role in Kyber and DeFi ecosystems. You can use your KNC token rewards to add liquidity to eligible KNC pools for more liquidity mining rewards or stake KNC in KyberDAO for governance participation and voting rewards.
MATIC is an ERC20 token that powers Polygon, effectively turning Ethereum into a multi-chain system. MATIC tokens have two purposes: securing the network by staking MATIC and paying transaction fees. You can use your MATIC rewards to add liquidity to eligible MATIC pools for more rewards.
Why Add Liquidity on Kyber DMM?
In addition to earning KNC and MATIC, Kyber DMM liquidity providers enjoy a range of significant advantages not commonly found in AMMs:
Amplified Pools: Liquidity providers can customize price curves to create amplified liquidity pools, significantly increasing capital efficiency and reducing trade slippage. In pools and trades of the same size, stablecoin pairs with smaller price range variations on Kyber DMM, such as USDC/USDT, ETH/sETH, can achieve amplification factors of up to 100-200x compared to other platforms. Providers can offer better prices and earn more fees with less capital.
Dynamic Fees: Protocol fees adjust dynamically based on market conditions to maximize returns and reduce impermanent loss impact on liquidity providers, accumulating fees automatically in the pool.
Open Access: Anyone can add liquidity to Kyber DMM pools, and any Dapp, aggregator, or end-user can access this liquidity. Kyber DMM has integrated with 1inch and Matcha.
No Third-Party Oracles: Less susceptible to external oracle risks. Kyber's vision is to provide sustainable liquidity infrastructure for DeFi, expanding beyond Ethereum networks like Polygon.
Security Commitment
Kyber DMM's codebase has undergone multiple rounds of review by the team and external auditors such as Chain Security, finding no critical issues, and remains open-source on Github for community review. KyberDMM is also insured for up to $20 million by decentralized insurance provider Unslashed Finance. However, all DeFi platforms and smart contracts carry risks. Beware of scams and phishing attempts.
Enhancing Liquidity for Kyber and DeFi
Kyber DMM is the first major protocol of Kyber 3.0's new liquidity hub architecture. The Rainmaker liquidity mining program is a crucial step to significantly boost liquidity and adoption for Kyber DMM, bringing in more KNC and MATIC holders to help develop the Kyber and Polygon ecosystems.
We welcome all DeFi participants to add liquidity on Kyber DMM to enjoy dynamic fees, higher capital efficiency, and additional KNC and MATIC rewards.
For developers looking to build with Kyber DMM, check out our documentation. We also offer prizes for the ongoing ETHGlobal HackMoney online hackathon.
Rainmaker is the first step in our many incentive programs. Follow us on Twitter and Discord to stay updated!
Advancing together with Kyber Network!