Kyber Network Review: Boost Liquidity In DeFi With Powerful Tools

Kyber Network is a multi-chain cryptocurrency trading and liquidity hub that combines liquidity from many sources to facilitate transactions at the best possible prices. It allows on-chain transactions that are completely transparent and verifiable without the need for KYC or a middleman. Let’s learn details about this project with Coincu through this Kyber Network Review article.

KyberSwap is the greatest location to trade and profit on Ethereum, Polygon, Binance Smart Chain (BSC), Avalanche, and Fantom networks; you can receive the best prices for your token swaps and earn more with your token holdings.

KyberSwap is a decentralized exchange (DEX) aggregator and a liquidity source with capital-efficient liquidity pools that generates fees for liquidity providers. It is DeFi’s first multi-chain Dynamic Market Maker and the core protocol in Kyber’s liquidity hub.

Unlike traditional AMM/DEXs and other liquidity platforms, KyberSwap is intended to maximize capital utilization by allowing liquidity aggregation for the best rates, exceptionally high capital efficiency, and responding to market situations to maximize profits for liquidity providers.

This Kyber Network evaluation will investigate the Kyber Network and examine the long-term adoption prospects and use cases of the KNC tokens.

What are Kyber Network, KyberSwap?

Kyber Network is a blockchain-based decentralized protocol that permits token exchange without the need for an intermediary and offers liquidity for decentralized finance (DeFi) applications.

Kyber Network, founded in 2017 by Loi Luu and Victor Tran, raised 200,000 ETH in an ICO for its native token, KNC.

After a successful Ethereum launch in 2018 with Vitalik Buterin as a major adviser, the Kyber team opened up its infrastructure in the hopes of attracting the wider decentralized economy.

Kyber Network’s main product, KyberSwap, is a multi-chain decentralized exchange (DEX) aggregator and automated market maker (AMM) that allows you to conduct token swaps without going via a centralized third party.

KyberSwap’s goal is to improve cooperation in the DeFi arena, and it has done so with over ten supported networks, while the largest decentralized crypto exchange, Uniswap, only supports five.

KyberSwap, as a decentralized exchange, links traders to liquidity pools rather than an order book. Smart contracts in the protocol offer liquidity and allow users to conduct transactions without the usage of middlemen.

Kyber Network is community-driven, with credible projects supporting its staking program, and is governed by KNC holders via KyberDAO, the network’s decentralized autonomous organization.

Kyber Network’s mission is to make Decentralized Finance available, affordable, quick, and secure to all users.

Kyber Network has been pushed by creativity and determination to become one of the leading DEXs in the DeFi industry during the last 5 years. KyberSwap is also a next-generation DEX aggregator, offering the best prices for traders while optimizing revenues for DeFi liquidity suppliers.

KyberSwap, which is now implemented on 13 chains including Ethereum, Polygon, BNB, Avalanche, Fantom, Cronos, Arbitrum, BitTorrent, Velas, Aurora, Oasis, and Optimist, combines liquidity from over 70 DEXs to provide customers with the best swap prices available.

KyberSwap provides a set of capital-efficient mechanisms intended to maximize incentives for liquidity suppliers.

The Dynamic Market Maker protocol (DMM) in KyberSwap Classic is DeFi’s first market maker protocol that dynamically adjusts LP fees based on market conditions, whereas KyberSwap Elastic is a tick-based AMM with industry-leading liquidity protocols and concentrated liquidity, customizable fee tiers, reinvestment curve, and other advanced features designed to give LPs the flexibility and tools to make earning strategies to the next level without compromising security.

Since its debut, KyberSwap has powered over 100 integrated projects and enabled over $11 billion in transactions for thousands of customers. Now, the Kyber Network Review article will learn about how the project works.

How does it work?

Kyber Network is a collection of smart contracts that can be deployed on any smart contract-capable blockchain, albeit as of December 2020, it is only implemented on Ethereum. In its network, the protocol pools liquidity from various sources, including token holders, market makers, and decentralized exchanges, into a single liquidity pool. Anybody may contribute to the network’s liquidity. Kyber Network’s principal users may do immediate token exchanges without the assistance of a trustworthy third party.

The platform offers a dynamic environment in which decentralized applications (dApps), traders, and liquidity providers (LPs) may transact and benefit from a plethora of tokens.

Developers may simply incorporate additional protocols into their apps without authorization by utilizing Kyber’s on-chain architecture and smart contracts. This allows apps to accept payments in their chosen cryptocurrency even if customers do not own the blockchain’s native token.

KyberSwap

KyberSwap, Kyber’s main project, is strategically using its unique features to fuel and empower diverse users in the DeFi ecosystem, such as traders, LPs, and developers.

The KyberSwap method allows for immediate cryptocurrency switching without the need to order books, deposits, or wrapping. To get the cheapest price, the exchange continually feeds requests across many centralized exchanges and liquidity pools. Customers may optimize their swaps to get either the lowest possible gas costs or the biggest possible profits. Varying slippage tolerance is also provided, as is key pre-trade information such as minimum returns and expected USD value.

KyberSwap, as a DEX aggregator, monitors rates from hundreds of exchanges to deliver the best prices to its clients. Kyber’s cooperation with Chainlink, a prominent oracle network, provides high-quality, accurate price feeds on KyberSwap.

KyberSwap also concentrates liquidity from the industry’s top liquidity protocols, allowing LPs to profit from their crypto holdings. KyberSwap Traditional Protocol and KyberSwap Elastic Protocol are its two major protocols.

• KyberSwap Classic Protocol uses AMM with configurable price curves that are tailored to each trading pair. It employs a dynamic fee mechanism that self-adjusts to maximize LP returns.
• The KyberSwap Elastic Protocol focuses on liquidity by enabling LPs to choose a pricing range for offering liquidity. It goes beyond Uniswap v3 by automatically reinvesting LP fees in the form of compound interest.

KyberSwap Elastic

If you want to deposit liquidity without having to return every day to reinvest, KyberSwap Elastic is perhaps the best option. It provides access to 11 chains as well as the ability to trade tokens and get one of the best exchange rates on these networks – all from a single platform.

The KyberSwap Elastic protocol reinvests users’ fee revenues automatically by putting them back into the liquidity pool, allowing them to earn additional fees via compounding. The protocol also protects against sniper assaults. KyberSwap Elastic has an anti-sniping function that assures attackers do not exploit liquidity providers during a swap.

Following the release of the KyberSwap Elastic Protocol, there have been several similarities to the Uniswap V3. Others even believe the Elastic Protocol is a fork of the Uniswap V3. Despite the fact that both platforms are formidable rivals, such statements are incorrect.

The source code for Uniswap V3 is licensed under Business Source License 1.1. This indicates it is not entirely open source. Since copyright regulations prohibit illegal commercialization of the source code for two years, the earliest Uniswap V3 fork may occur is in 2023. As a result, the KyberSwap Elastic Protocol is not a fork of the Uniswap V3 protocol. Instead, it was created using the original source code.

Fees

Kyber Network does not impose withdrawal fees, making it a very competitive product. It should be mentioned, however, that there are exchanges that pay network costs for the benefit of traders, i.e., their withdrawal fees are nil. Yet, since network costs are very small, charging just network fees is also a trader-friendly price structure.

KyberSwap, unlike several DEXs, does not charge aggregator, administration, or platform fees. 90% of liquidity providers’ fees are retained, with the remaining 10% going to the KyberDAO for governance awards. These benefits are awarded in KNC to KNC holders who stake and vote on governance initiatives in proportion to their stake.

KNC token

KNC is the Kyber Network’s native token, which was launched in 2017. At the Initial Coin Offering (ICO), the KNC price was $1 per token. The remaining 61% of the 226 million KNC raised for the ICO was shared 50/50 between the founders/advisers and the firm. This control has a one-year lockout period and a two-year vesting period.

By linking liquidity seekers and liquidity providers, the token successfully sustains the network.

KNC is also the governance token for the Kyber Network ecosystem. Token holders may stake KNC tokens on KyberDAO to vote on platform improvements, increase the value of their tokens, and increase adoption rates. This improves the project’s usefulness and value. The tokens are staked in two-week cycles termed “epochs,” which are measured in Ethereum block timings. Holders get a share of the fees collected by the protocol’s liquidity pools.

KNC is also a deflationary token, which means that a portion of the token created by fees is burnt to reduce the overall quantity of the coin. Deflation is helpful to the economic flow of the asset. KNC may also be used to facilitate crypto payments on platforms like Monolith wallet and Pundi X.

Security

The Kyber Network codebase has been examined by leading audit companies Chainanalysis and Hacken and is open to the public.

Since Kyber Network is a non-custodial, decentralized exchange, users must connect their wallets in order to begin trading while maintaining anonymity and total control over their crypto assets.

Conclusion of Kyber Network Review

Kyber Network aspires to be a DeFi community leader in supporting reserve liquidity via its functionality and operations. It provides liquidity by pooling liquidity from many sources and is entirely driven by code, a distributed network of software users, and the Ethereum blockchain.

Liquidity is critical to the evolution of DeFi, and Kyber Network is pioneering the road toward becoming a trust-free liquidity center. Because of its unique Kyber reserve models and protocol architecture, it is positioned as a critical liquidity infrastructure supplier for a decentralized economy.

Kyber is continually developing to connect additional dApps and provide more assets for a smooth token-swapping experience as the DeFi ecosystem evolves. Hopefully the Kyber Network Review article has helped you understand more about the project.

DISCLAIMER: The Information on this website is provided as general market commentary and does not constitute investment advice. We encourage you to do your own research before investing.

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