Kyber Network To Launch On Polygon With $30 Million Liquidity Mining Program
Decentralized finance liquidity hub Kyber Network would expand to Ethereum layer 2 scaling solution Polygon network later this month.
The Kyber community is said to have voted in favor of the move according to the Kyber Improvement Proposal for the expansion.
Kyber’s New Program Aimed At Enhancing DeFi Liquidity
Kyber also disclosed that it would be rolling out its first liquidity mining program called Rainmaker on the platform’s Dynamic Market Maker (DMM) protocol. This would be launched on Polygon on June 30th to mark Kyber’s expansion into the network.
The DMM is an improvement of an automated market maker design. It enables users to trade ERC-20 tokens in capital-efficient liquidity pools that are less prone to impermanent loss and slippage.
According to the firm, the Rainmaker program aims to enhance the liquidity of Ethereum and Polygon-based decentralized finance (DeFi) ecosystems.
The program will run for two months and distribute $30 million in rewards to liquidity providers on the Kyber DMM across both Polygon and Ethereum.
Under the program, 2.52 million Kyber Network Crystal (KNC) tokens worth about $5 million and another $500,000 worth of MATIC tokens will be distributed to liquidity providers (LPs).
Kyber would also allocate $25 million worth of rewards to liquidity providers for the existing Ethereum-based DMM.
Kyber becomes the latest of many other leading Ethereum-native projects to join Polygon. Speaking on the Polygon partnership, co-founder of Kyber Network, Loi Luu, said,
“Through this partnership, Polygon’s vibrant ecosystem will gain access to the highly capital efficient and flexible Kyber DMM protocol, and we believe this will empower more liquidity providers, traders, and developers to effectively engage in the world of decentralized finance.”
DeFi Protocols Migrating From Ethereum To Polygon
Polygon has recently exploded in popularity as major DeFi protocols have switched to the layer 2 scaling solution to bypass higher fees and congestion on Ethereum.
According to data by blockchain data research firm Nansen, between June 1 and 7 alone, more than $1 million valued stablecoin transactions dominated 65% of daily transaction volume on Polygon.
This emphasizes the shift of large-valued players in the decentralized finance (DeFi) sector migrating from Ethereum to Polygon’s fast-growing ecosystem.
DeFi protocols such as Aave, Curve, Sushiswap, 1inch Network, and Ren have joined Polygon this year, attracting billions of dollars in liquidity.
Decentralized exchange 0x protocol also partnered with Polygon this year. The protocol launched an API tool to enable Ethereum-based DEXs to interact with the Polygon ecosystem.
The 0x API features DEX liquidity channels like SushiSwap, Dfyn, and Curve, as well as Dodo, mStable, QuickSwap, and Cometh.
Jimmy has been following the development of blockchain for several years, and he is optimistic about its potential to democratize the financial system. When not immersed in the daily events in the crypto scene, he can be found watching legal reruns or trying to beat his Scrabble high score.