Kyber Network

The Kyber Network Crystals (KNC) is a protocol that aims to make swapping digital assets and cryptocurrencies simple and efficient. The Kyber protocol aggregates liquidity from a wide range of reserves, powering instant and secure token exchange in any decentralized application, meaning that the network doesn’t require any bank or other institution in the middle. On the network, there are two categories of users: makers and takers. Makers create liquidity by holding their tokens, and takers are the end users that are requesting the swap of tokens.

Over the years, it has been proven that cryptocurrency trading on centralized exchanges is prone to cybersecurity hacking and internal fraud. Moreover, trading on centralized exchanges is incompatible with DeFi (decentralized finance) applications since bridging between decentralized applications and centralized servers is theoretically impossible without compromising the trust model. Regardless, all DeFi applications require good liquidity sources, which is a necessary component for providing high-quality services.  

The whitepaper states that, to overcome this issue, the Kyber Network provides an exchange of tokens in an instant and decentralized way by using liquidity pools—pools of multiple cryptocurrencies that any project has the ability to tap into. In contrast to centralized exchanges, there is no need to register or open an account. Kyber's approach allows liquidity to be aggregated from numerous sources into a single network. This implies it allows takers to conduct multiple token transactions in a single blockchain transaction via a single endpoint. In addition, end users, decentralized exchanges, and other decentralized protocols can all contribute liquidity via the Kyber protocol, which allows for a wide range of implementation options for liquidity providers.

Another potential use case offered by Kyber is decentralized applications (DApps). Conceptually, DApps are similar to any other apps or games users could find on their computer or phone. The key difference is that DApps are based on and driven by decentralized protocols like Ethereum. DApps can connect to the Kyber network in order to accept any token from users but only receive the token they want. The token swaps occur on the Ethereum blockchain, and the transactions are completely transparent. 

KNC is the native utility and governance token used to facilitate and pay fees for transactions on the Kyber network. The token is built on Ethereum in accordance with the ERC20 standards, which define the common list of rules for the tokens to function in the Ethereum ecosystem. KNC also utilizes smart contracts. These are just like regular contracts; however, instead of being drafted on paper, these contracts run in the form of protocols on the blockchain. Smart contracts offer the infrastructure in the Kyber network that allows one token to be swapped for another.

Founded in 2017, the cofounders of Kyber include Loi Luu, Victor Tran, and Yaron Velner. The whitepaper v0.8 was released on August 27, 2017. 

Luu earned his doctorate in computer science from the National University of Singapore, where he worked on blockchain securities. Tran has been working on cryptocurrencies since early 2016, and he is the principal engineer for the Bitcoin open-source project SmartPool, which Luu also cofounded. Velner holds a PhD in computer science from Tel Aviv University and served as CTO at Kyber Network. Currently, he serves as CEO and protocol architect at B.Protocol.

The Kyber team raised money through an initial coin offering (ICO) in September 2017. During the ICO, the price per token was 0.00166 ETH. The ICO ended on September 15, 2017, and the total money raised was around $52 million. The Kyber team launched the mainnet in February 2018.

Staking is the process of receiving rewards by holding certain cryptocurrencies. Cryptos that allow staking follow a consensus mechanism known as proof of stake, which is the way they ensure that all the transactions are verified and secured without an intermediary.

KNC holders can stake the tokens in KyberDAO. KyberDAO is a community platform that provides KNC holders a say in the network’s future. It incentivizes participation by giving a share of the ETH generated from protocol fees. Additionally, there is a Kyber community pool, which is a trustless pool for taking part in governance and earning rewards on the network. The pool was created to represent the community's interests while also making involvement simple for users. To earn rewards from staking KNC, users must vote on every proposal. Anyone can stake KNC, vote on proposals, and earn rewards on kyber.org, which is the only official platform managed by the Kyber team.

The maximum supply of KNC tokens is capped at around 226 million KNC.