Kyber Network is the liquidity protocol that is powered by on-chain token reserves.
It has also been implemented in the crypto ecosystem.
The most famous use case of the Kyber network is the KyberSwap market orders, which allow users to buy and sell tokens directly from the reserves.
This protocol has also contributed to the blockchain gaming sector that uses on-chain payments and trades.
It has given the opportunity to the developers to quickly integrate payment solutions and accept any supported ERC20 tokens for the in-game items and player based trades.
The Kyber Protocol presents a simple solution for developers; it does not require them to build a complex system and worry about maintaining smart contract security upgrades.
In-App trading features of Kyber Network
Traders can use the KyberSwap app to trade supported ERC20 tokens.
KyberSwap supports both market and limit orders.
All trades are subject to Ethereum gas fees, as the trades are performed instantly on-chain.
As opposed to other popular exchange models, Kyber Network does not have an order book, and it’s a liquidity pool managed by on-chain reserves.
Market makers can deploy their own token reserves and launch new projects that require on-chain liquidity.
They deploy the reserve price model and manage the token reserve on kyber and provide liquidity.
Prices are set by an algorithm with specific parameters that are inputted during setup.
Application developers, Dapps, and wallets may be used to access the Kyber network for on-chain liquidity which is provided instantly to open finance applications like lending, wallets, games, Robo-advisors, and other crypto exchanges.
Payment gateways, Dapps that require users to “pay” in certain tokens use Kyber Network to provide atomic swaps to their users and remove the friction involved in having to hold a specific token.
Use Cases
- Crypto traders – Ethereum crypto traders are using the Kyber network’s on-chain liquidity as their reliable source for providing the most popular Ethereum tokens and stable coins.
- Exchange Arbitrators – More arbitrators are using Kyber to initiate arbitrator trades when the opportunity arises. For example, arbitrageurs might create trades between Uniswap and the lending protocol debt auctions.
- Defi users – Applications like Compound and DYDX use Kyber on-chain liquidity in the background to auction off the margin loans that have reached their borrow limits. Defi users across many wallets are instantly buying and selling into their portfolio using Kyber Network integrations without ever leaving the portfolio interface.
KNC Tokenomics
- DAO staking rewards, DAO participation requires the KNC token to be staked to vote on the governance of the protocol. Users that participate in the governance are rewarded with a share (currently 70%) of the reserve fees collected.
- Platform fees, 0.25% of the fees are charged to the reserve manager and these fees are not paid directly. The market makers that run the reserve managers price the tokens with the fee already priced in. This fee is then used to supply the staking rewards and burn supply according to the ratio that the protocol governance has set.
- Governance, a new governance system has been introduced to the Kyber protocol upgraded as Katalyst. Users will need to hold and stake KNC tokens in order to vote and participate in the protocol governance.
- Supply burn, 70% of the fees collected in KNC are used to burn the token from the supply; Now with the Katalyst upgrade, only 5% is burned. In the future, this 5% could change, and supply burn can even be completely removed.
- Limit order fees, KyberSwap’s limit orders include a 0.1% fee on all trades. KyberSwap is an application built by the Kyber Network team; therefore, the fees are charged in the trading pair. The fees are then used to fund ongoing KyberSwap development costs.
- KyberSwap Discount, KyberSwap users that hold at least 2,000 KNCs in their trading wallet. All limit order transactions on the KyberSwap interface are free when you gold 2,000 KNC’s, with a limit of 10 orders per day. It’s important to note that this feature only applies to the KyberSwap application, and other applications that are integrated into Kyber Network can charge their own trading fees.
Important Projects
KyberDAO – A dashboard for the protocol governance and staking features. View important metrics like reward distribution, governance participation, and the locked token supply in the staking contracts.
KyberSwap – The flagship application built by the Kyber Network team. Access the token reserves and trade with instant liquidity.
Kyber Tracker – The Kyber Network protocol dashboard. View important protocol metrics like reserve liquidity, trade volumes, and collected network fees.
Ecosystem Reports – Kyber Ecosystem Reports have become a monthly status report that not only documents the adoption of the Kyber Protocol, but also the adoption of DEFI.
Conclusion
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FAQ’s
Is the Kyber network a good investment?
It has a great investment for individuals and businesses because it means a merchant could accept any cryptocurrency and by using the Kyber Network they would be receiving only the currency of their choice, whether that be Bitcoin, Ethereum, or some other coin.
Where can I buy the Kyber network?
The most famous use case of the Kyber network is the KyberSwap market orders, which allow users to buy and sell tokens directly from the reserves.
Will Kyber network go up?
A new governance system has been introduced to the Kyber protocol upgraded as Katalyst.
Users will need to hold and stake KNC tokens in order to vote and participate in the protocol governance.
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