KyberSwap Classic
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KyberSwap Classic Discontinuation
On 26 March 2024, the Classic protocol was discontinued. More details can be found here
KyberSwap Classic was conceived based on the observation that the standard AMM model was inadequate when it came to optimizing capital efficiency and price spreads. A one-size-fits-all pricing curve meant that capital was deployed across all prices regardless of the price correlation between unique token pairs. Moreover, AMM price spreads were market neutral as the same fees were charged regardless of market volatility. Collectively, this lowered LP incentives as the majority of their funds were left unutilized while they were unable to charge a premium for market making during more volatile periods where the risks of impermanent loss is greatly magnified.
In order to maximize yields and encourage deeper market liquidity, KyberSwap Classic amplifies capital utilisation as well as self-adjusts trading fees to take advantage of the existing market conditions. Consequently, KyberSwap Classic is able to achieve much better risk-adjusted returns for providers while simultaneously reducing slippage for traders.