Ethereum-based decentralized exchange Kyber Network is partnering with the Ethereum layer 2 scaling solution Polygon network to enhance the decentralized finance (DeFi) liquidity.
- In an announcement on Wednesday, Kyber Network said it will expand to the Polygon network on June 30 and launch "Rainmaker" – the two-month-old Kyber dynamic market maker (DMM) protocol's first liquidity mining program on Polygon and Ethereum.
- "Through this partnership, Polygon's vibrant ecosystem will gain access to the highly capital efficient and flexible Kyber DMM protocol," Loi Luu, co-founder of Kyber Network, said in a press release shared with CoinDesk. "We believe this will empower more liquidity providers, traders, and developers to effectively engage in the world of decentralized finance."
- The Rainmaker program aims to bring more liquidity to Ethereum and Polygon-based decentralized finance (DeFi) ecosystems by incentivizing Kyber DMM liquidity providers with $30 million in rewards over three months.
- Polygon liquidity providers will receive $5 million with the rest to be paid to Ethereum liquidity providers, Kyber network's spokesperson told CoinDesk in a Telegram chat.
- During the two-month Polygon phase of the liquidity mining program, six eligible liquidity pools will receive 2.52 million Kyber network tokens (KNC) and Polygon's MATIC tokens worth $500,000.
- Recipients can employ KNC and MATIC tokens for more liquidity mining. Additionally, KNC tokens can be staked in KyberDAO to participate in Kyber's governance and earn voting rewards.
- The Ethereum phase will run for three months and distribute 12.6 million KNC tokens to liquidity pools.
- Kyber's dynamic market maker (DMM), aimed at bringing greater flexibility and high capital efficiency by offering liquidity providers amplified pools and dynamic fees, went live in early April.
- Polygon's adoption has exploded in recent months with major DeFi protocols switching to the layer 2 scaling solution in a bid to bypass relatively higher fees and congestion on Ethereum.