Leading liquidity ecosystem Kyber Network revealed a new reserve system on which other DeFi developers will be able to deploy unique reserve models to provide liquidity.
Moreover, Kyber has also launched the Reserve Innovation Program which distributes $100,000 in grants to the best models. The team announced the news in a Medium blog post on November 30.
As a protocol that primarily focuses on liquidity, Kyber Network thought of revolutionizing decentralized finance by developing a unique liquidity system. So far, the team has used the Kyber Reserve System for distributing and collecting liquidity. In this system, reserves are deployed on the mainnet and then approved by the community through the KyberDAO.
Once a taker, the market participant who takes liquidity, creates a trade, the system scans the entire Kyber Network to find liquidity at the best price for that specific trade.
Now, Kyber allows anyone to create reserve models by deploying smart contracts on their native blockchain network. By doing so, the team enables enthusiasts to build reserves for various use cases. Such a model fosters innovativeness in a sector that greatly needs it to push forward.
After a developer deploys his new reserve model, Kyber will accordingly add it to the main blockchain network. There, it provides liquidity and access to more than 100 dApps.
Kyber already hosts numerous reserve models designed for specific niches. One such model is the Fed Price Reserve (FPR) which focuses on professional market makers.
By having the reserve focus just on MMs, we have an environment where these major market participants have access to lower fees and more efficient capital management.
Reserve Innovation Program to grant up to $20K per participant
As we can see, developers have the ability to create unique liquidity models that can be utilized by specific groups. If each group has access to liquidity reserves that fits their needs best, then the overall market is more efficient.
Within the world of decentralized finance liquidity means everything, therefore, Kyber believes that we have to make it as efficient as possible.
To incentivize developers to participate and innovate new reserves, Kyber offers a $100,000 Reserve Innovation program. In one section, the Kyber team notes:
We aim to have many DeFi developers going beyond the existing models and utilise Kyber’s flexible reserve system to create new reserve models for a myriad of use cases. In support of our goal to enhance liquidity and deliver a sustainable liquidity infrastructure, Kyber is launching a Reserve Innovation Program!
Kyber Network
Furthermore, Kyber Network notes that these grants will fund research and development for important new reserve models. Each winner can receive up to $20,000 in KNC tokens. However, the full amount may only be won if the developer or dev team completes the entire reserve model, along with the mainnet. On that account, Kyber distributes partial grants to partial projects and vice versa.
Apart from the monetary reward, Kyber offers a plethora of other bonuses. This includes mentorship, marketing support, production support, and much more.