- Are you struggling to exchange your newly bought Ethereum tokens because no centralized exchange is listing it?
- Or are you looking out for a rare gem token that is not listed on any centralized exchange?
Well, one of this is related to regulatory pressure on cryptos around the world which manifests itself on centralized exchanges in the form of the delayed listing while the other is due to poor liquidity.
But, with the number of tokens growing, many new innovative solutions to solve the problems related to tokenization are emerging too.
A project that solves the above-mentioned problems in a unique and decentralized way is Kyber Network (KNC).
In this fundamental analysis of Kyber Network, I will touch upon the following points:
- What Is Kyber Network
- How Kyber Network Works
- KNC Utility
- Kyber Network Team
- KNC Token Supply & KNC Market Cap
- Where To Buy Kyber Network Token (aka KNC)
- Kyber Network Token (aka KNC) Wallets
- Kyber’s Roadmap & Conclusion
- Official Kyber Resources
What Is Kyber Network?
Kyber Network is a decentralized exchange and a proxy payment service that is open-source, trustless, instant, secure, compatible, and highly liquid for the exchange of cryptoassets.
The exchange of assets happens on-chain via Ethereum’s smart contract technology whereas order books are completely removed and replaced by highly liquid reserves.
By being trustless and powered by smart contract, it also provides the option of accepting payments in the form of any crypto tokens.
The motivation to build such a system are listed below:
- Risk of centralization
- Lack of instant exchanges
- The problem of existing decentralized exchanges
- The problem of having many digital assets
How Kyber Network Works
Kyber Network solves the above-mentioned problems in a decentralized fashion via smart contracts and rich APIs.
Via Kyber anyone can exchange token A for token B at a pre-known price. Even if you are a merchant who only accepts token B for payments and the customer only has token A, the consumer can send the merchant token B via Kyber in a cost-effective way without worrying about the liquidity or order books.
And this functionality can be extended to be used for participating in ICOs/token sales where the ICO/sale only accepts a single type of token but the investor doesn’t have that token at the time of ICO/sale.
To achieve all this, there are 5 key actors of Kyber Network that works together:
#1 Users: Users in Kyber Network include individual users, smart contract accounts, and merchants who send and receive tokens to and from the network.
#2 Reserve Entity: Reserve Entity, or entities, provide liquidity to the platform. This can be Kyber’s own reserve or a third party’s, that are registered by other market makers. Reserves can also be classified into public and private reserves which do and do not take contributions from the public.
#3 Reserve Contributors: Contributors provide capital to the reserving entity and share the platform profit. This actor exists only in public reserves and accepts contributions from the public to build up the reserve.
#4 Reserve Manager: A Reserve Manager is the one who maintains the reserve entity and contributors to determine exchange rates and feeds the rates to the Kyber Network.
#5 Kyber Network Operator: This operator is responsible to add and remove reserve entities, list/de-list pairs of tokens in the network. Initially, the Kyber team will act as the Kyber Network operators to bootstrap the platform in the early phases. Later on, a proper decentralized governance will be set up to take over the task.
I have taken into account only one reserve in the scenario above for simplicity, but in reality, there will be many public and private reserves that will guarantee liquidity. That’s why when a trade/ conversion request arrives, Kyber Network will fetch the conversion rates from all reserves that can process the request and then select the best rates to execute the request.
Also, each actor in the system only interacts via smart contracts that are atomic and on-chain in nature and there is a negligible possibility of human error.
Note: Kyber Network, at any point in time during this cycle, doesn’t hold tokens with themselves unless they are running one of the reserves.
Lastly, the good thing about decentralized exchanges like Kyber Network is, they never control your funds and you are always the in charge of fund’s private keys. Similarly here too, you control your assets on Kyber via:
For fueling the operations within the Kyber Network, it employs its own native token called KNC. This KNC token is an ERC20 token and is not a security token or a dividend paying token in any way.
- KNC is used to pay to partners like wallets, blockchain explorers etc who brings/divert new users to Kyber Network.
- Before operating, reserves need to pre-purchase KNC tokens which are used further in every trade at a pre-determined set rate as fees to Kyber Network. This fee is charged for the access rights of Kyber Network and it’s user base from which managers will be earning higher profits.
This collected fee is further burned permanently by Kyber Network after deducting the operations cost for appropriately rewarding the HODLers of KNC as well as the actors in the system.
As an example, for a trading volume of 10 ETH with a 0.01% fee, a corresponding 0.001 ETH worth of KNC will be paid by the chosen reserve to Kyber Network as a fee for the use of the reserve dashboard and access to network users. Suppose the rate of KNC at the trading time is 1 KNC for 0.1 ETH, the reserve needs to pay 0.01 KNC to the Kyber platform. The wallet/ website that helped the user initiate the trade will get, supposedly, 5% of the fees, or 0.0005 KNC. The remaining 95% of the fees or 0.0095 KNC will be burned forever.
Kyber Network Team
The Kyber Network team comprises of highly learned people, with two of the co-founders being crypto researchers and PHDians.
Their advisory panel is impressive too and boasts of pioneers like Vitalik Buterin on board. See the full advisory board here.
KNC Token Supply & KNC Market Cap
Kyber Network finished its ICO in September 2017, where they distributed around 61% of the total minted tokens to the public.
The total available fixed supply was 226,000,000 Kyber Network Crystal tokens (KNC) at that time and token distribution ratio was:
- 19.47% allocated to the company
- 19.47% allocated to the founders, advisors and seed investors
- No more than 61.06% allocated to the public from private sale and public sale. The unsold tokens were burnt.
According to CoinMarketCap, the total circulating supply is 134,132,697 KNC, and the current price of each unit is $0.38. That brings its market cap value at approximately $51 million (at the time of writing this article).
Where To Buy Kyber Network Token (aka KNC)?
Here are some of the exchanges where you can buy KNC tokens:
- Binance: Supported pairs are KNC/BTC, KNC/ETH
- KuCoin: Supported pairs are KNC/BTC, KNC/ETH
- Huobi: Supported pairs are KNC/BTC, KNC/ETH
- Gate.io: Supported pairs are KNC/USDT, KNC/ETH
- ABCC: Supported pairs are KNC/ETH
- Cryptopia: Supported pairs are KNC/BTC
- IDEX: Supported pairs are KNC/ETH
- Livecoin: Supported pairs are KNC/BTC, KNC/ETH, KNC/USD
Note: Buying KNC in fiat currencies such as USD, EUR, or GBP is a challenge as of now.
Kyber Network Token (aka KNC) Wallets
KNC is an ERC20 token so you have plenty of options for storing your KNC tokens safely. Some of these options have been listed below and will help you keep your KNC safe.
- Mobile Wallets: Coinomi (Android), Jaxx (Android, iOS)
- Browser/Web Wallets: Jaxx (Chrome Extension)
- Desktop Wallets: Jaxx (Windows, Linux, Mac), MyEtherWallet
- Hardware Wallet: Ledger Nano S, Trezor
Kyber’s Roadmap & Conclusion
Kyber Network doesn’t stop here as it has many things to offer in the near future. Here is a sneak-peek into their roadmap for 2018-2019.
Currently, Kyber is perfecting the exchange of ERC20 tokens and Ethereum but by the end of the year, it will start trading advanced financial instruments like forwards and options so that users can hedge their prices.
With chain relays and development and maturity of atomic swap technology, Kyber Network will allow Ethereum accounts to receive payments from different cryptocurrencies. This will eradicate a lot of friction.
These are reasons as to why Kyber Network is looking better than many other decentralized exchanges and payment solutions we have seen until now. Here is a quick comparison between Kyber & others:
Also, as the number of crypto assets is increasing, there is an unparalleled need for their liquidity because centralized exchanges don’t list tokens so easily.
Even though everything is smooth for Kyber right now, they would need to keep a strong check on the quality of their smart contract code which, if ever exploited, will do a lot of damage to the overall market of decentralized exchanges.
Update: Kyber Swap is now live where you can integrate different wallets and start exchanging amongst different ERC20 tokens. Here is the first look of the swap interface:
Note: We are not your financial advisors and this is not a financial advice.
Official Kyber Resources
Some official links that will help you stay updated with Kyber Network’s news:
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