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DMM Ecosystem

The DMM ecosystem is comprised of 3 types of actors: liquidity providers, traders, and developers. Liquidity providers are incentivized to contribute ERC-20 tokens to common liquidity pools. Traders can swap these tokens for one another for a fee (which goes to liquidity providers). Developers can integrate directly with the DMM smart contracts to create new interesting use cases and projects.

In total, interactions between these classes create a positive feedback loop, fueling digital economies by defining a common language through which tokens can be pooled, traded and used.

Liquidity Providers#

LPs can be comprised of several different groups:

  • Passive LPs โ€” passively invests their assets to accumulate trading fees.

  • Professional LPs โ€” focused on market making as their primary strategy, where they usually develop custom tools for tracking their liquidity positions across different DeFi projects.

  • Token Project LPs โ€” token projects that choose to create a liquid marketplace for their token, which allows their tokens to be bought and sold more easily, and unlocks interoperability with other DeFi projects through the integration with the DMM.

  • Liquidity Mining Projects โ€” DeFi projects that use LP tokens as a means of participation in their liquidity mining or incentives program.

  • Builders โ€” DeFi pioneers using the DMM protocol to experiment on new use cases and functionality.


There are a several categories of traders in the DMM ecosystem:

  • Speculators โ€” uses a variety of community built tools and products to swap tokens using liquidity pulled from the DMM protocol.

  • Arbitrage bots โ€” help equalize prices across broader token markets and keep things fair.

  • Dapp users โ€” acquires tokens from the DMM protocol for use in other Dapps.

  • Smart Contracts โ€” executes trades on the protocol by implementing the swap function.

In all cases, trades are subject to the same fee for a particular pool for trading on the protocol. Each is important for increasing the accuracy of prices and incentivizing liquidity.

Developers / Projects#

The DMM protocol can be used and integrated into any new protocol or project. The use cases are far-reaching, but some examples include new user interfaces, analytics tools, wallets, and many DeFi-related projects. The DMM protocol is one of the open-source contributions to the greater Ethereum ecosystem, which was a result from the open-source contributions of Uniswap and others.

The KyberSwap team and the Community#

The KyberSwap team along with the broader Kyber communities drive development of the protocol and ecosystem.