Open-Source Trading Bot To Bring Liquidity To The Kava Ecosystem
Kava Labs is collaborating with the Hummingbot Foundation to integrate its open-source market-making and arbitrage bot toolkits into the Kava Ecosystem. At first, Kava Swap will be the focus, but the partnership will lay the groundwork for future DEXs such as Cosmostation’s Stable Swap.
What Is Hummingbot?
Launched in 2019, Hummingbot is the leading open-source trading bot project in crypto with 36k+ installs and connectors to over 30 exchanges and protocols including Binance, Coinbase, FTX, Ethereum, Uniswap, Terra, and more.
The Hummingbot Foundation’s mission is to democratize high-frequency trading (HFT) through open source technology. Hummingbot helps you build and run trading bots on any platform, centralized or decentralized. Similar to Bitcoin mining software, Hummingbot is client software that runs on a user’s machine, which prevents users’ private keys and strategies from being exposed externally.
Liquidity On Tap
Hummingbot’s high-frequency bots allow users to act as market makers on a network of both centralized and decentralized exchanges. For users, this means generating returns through automated price arbitrage and trading strategies by targeting the exchanges with the most opportunity at any given moment.
“The Kava Ignition Fund is all about accelerating the usage and liquidity of the Kava Ecosystem. Humming bot is the largest distributed liquidity provider in crypto. We’re thrilled to sign them on and create a custom connection of Hummingbot Gateway to the Kava ecosystem, driving liquidity to every financial protocol that launches on Kava.” — Scott Stuart, Kava Labs CEO
For automated market makers (AMMs) like Kava Swap, Hummingbot’s users act as supplementary market makers, ramping up the liquidity of the exchange as they seek to generate returns. This increased liquidity results in faster trades, lower price slippage, and an overall better trading experience for everyone.
In addition, Hummingbot’s liquidity miner tool provides an additional avenue for tokens launching on Kava to hyper-accelerate their liquidity on Kava Swap and other Hummingbot-connected exchanges. Much like how existing liquidity rewards function on Kava Swap, new tokens launching on Kava can assign an additional reward pool to incentivize Hummingbot users to provide liquidity.
What To Expect
The Hummingbot Gateway integration with the Kava Ecosystem will begin with the connection of Kava Swap to the Hummingbot framework. This will allow Hummingbot users to begin automating trades and market-making, as well as earning liquidity rewards on Kava Swap. Kava Labs will support the development and implementation of the integration with funds from the Kava Ignition Fund.
“Hummingbot Gateway helps traders run bots on any protocol — it’s lightweight middleware that integrates with various protocols and can be used alongside Hummingbot or as a standalone component. We are excited to integrate Gateway into the Kava Ecosystem and support every DeFi app on the Kava blockchain.” — Michael Feng, Co-founder & CEO of Hummingbot
Future Support for Cosmostation
In the future, Hummingbot support for other DEXs on Kava, such as the upcoming Cosmostation Stable Swap, may be added. Projects launching tokens on the Kava Ecosystem will also be able to accelerate their liquidity at launch through incentive pools awarded through Kava Swap and Hummingbot to liquidity providers.