What is Kyber Network （KNC）

2022-09-02, 02:13

[TL;DR]

🔹 Kyber Network is an on-chain liquidity model that enables the seamless deployment of decentralized token swaps into any application, allowing data exchange among all ecosystem users.

🔹 KNC is the first project to allow investors to easily swap tokens without needing a centralized exchange.

🔹 Kyber Swap is a feature of the KNC that enables instantaneous trading of various cryptocurrencies without order books, deposits, or wrapping.

🔹 Developers can build new payment systems and applications, including fast token exchange services, ERC20 payments, and decentralized applications (DApps), a world where any token is accessed everywhere.

🔹 Analysts estimated that Kyber's price might reach $8 in 2025; considering the direction of the U.S. dollar's rise, this prediction is still speculative.

Introduction

The structure of the crypto markets determines how well the decentralized platforms function. Therefore, numerous projects and recent innovations in the market tend to concentrate more on the idea that there is still much opportunity for improvement in the decentralized market structure.

One of such numerous projects is the Kyber Network (KNC) technology, which was developed to increase decentralized exchange liquidity. It has evolved into precisely a heavily used platform in DeFi activities. The KNC project, among others, intends to enable any token owner to exchange one token for another without fuss. It also aims to bring a breach to the security problems most DeFi platforms face. According to the whitepaper, the Kyber Network uses liquidity pools to provide an instant and decentralized exchange of tokens.

What Is Kyber Network (KNC)?

Kyber Network is a decentralized exchange (DEX) liquidity network built on the Ethereum blockchain, which enables quick and easy exchange between different digital assets, allowing the users to trade cryptocurrencies seamlessly through decentralized apps (DApps) wallets. It was launched by Loi Luu, Victor Tran, and Yaron Velner in 2017.

Its exchange is run entirely by computer code, a distributed network of software users, and the Ethereum blockchain rather than by a single corporation. Kyber network is one of the rising numbers of DeFi cryptocurrencies that aim to create an alternative to conventional exchanges by enabling users to exchange crypto assets.

To promote liquidity and growth more effectively, KyberDAO can upgrade, mint, or burn KNC. The ownership of KNC gives one a stake in all significant innovation and liquidity mechanisms developed for DeFi.

What Makes the Kyber Network Unique?

Kyber distinguishes itself from other decentralized trading platforms by providing new and distinctive features like:

1. Decentralization:
Kyber Network (KNC), as a decentralized trading system, enables instantaneous, liquid transactions, and they are not controlled by a single corporation or individual. Also, their decentralization makes them secure from cyber attacks, unlike centralized protocols. Furthermore, holders maintain complete control over the funds because the exchange doesn't hold tokens.

2. Instant Exchanges
The ability to transact instantly on the network without the need for registration or making deposits is one of Kyber's most fascinating features. This is essential for mass adoption in the fast-paced environment of today. Instead of using an intermediary party or an order book, Kyber uses an on-chain reserve system that brings liquidity to the exchange.

3. Kyber's Liquidity Protocol
DeFi applications require access to a reliable liquidity supply to offer their users financial services. Kyber thus uses reserves to provide liquidity. Reserves are sets of liquid asset pools that include various cryptocurrency funds. Users can instantly trade tokens without a CEX by keeping a reserve of tokens in smart contracts. Also, by collecting liquidity through different liquidity protocols, Kyber assures that aggregators get the best price.

4. Proxy Payments
Kyber Network also allows proxy payments – users can pay anyone with any token. The platform processes the payment and sends it to the recipient as if it had come from the original author.

5. Security
Since the Kyber Network is a decentralized finance (DeFi) network, it does not hold any assets or private data. This proves that there is little chance of information and private data getting hijacked. As the platform is non-custodian, it is entirely up to the holder to set up a wallet system and to keep their tokens secure.

How does Kyber Network (KNC) work?

The network functions through on-chain conversion for the tokens sent by the users. The allocated tokens get directly into the recipient's wallet without the need for a mediator.

Generally, the functionality of the Kyber Network Crystal Legacy revolves around three mechanisms which are:

1. Kyber Reserve Mechanism – This reserve function, a type of local liquidity provision, aids in executing blockchain transactions. The system integrates user-contributed tokens with liquidity supplied by external parties. As a result, token forms can have lower slippage and gas costs. The reserve fund is secured by the transparent fund management protocol, which ensures that all transactions carried out with reserves are documented.

2. Kyber Swap Mechanism – The platform's Kyber Swap function enables immediate trading of several cryptocurrencies without needing order books, deposits, or wrapping. To discover the best rate, the exchange actuates trades by dynamically tracking requests across several centralized exchanges and liquidity pools. Additionally, clients can optimize their swaps for the highest returns or the cheapest gas prices.

3. Kyber Developer Mechanism – The network has drawn several projects since its developer-friendly protocol. Such projects consist of Dapps, DEXs, and cryptocurrency wallets that use specific tools and documentation to integrate into the Defi ecosystem. This interface gives programmers the resources to update the decentralized Kyber Network exchange with new apps, wallets, deals, and platforms. This, however, proves that the platform is improving and becoming better for its users.

What is the Kyber Network Crystal (KNC)?

Kyber Network Crystal (KNC) is the native token of KyberSwap that powers the Kyber Network.

The Kyber Network Crystal currently trades at $1.7239. According to Cryptopolitan analysis, KNC is expected to reach a $2.50 average price in 2022 and peak at $3.64 in 2025.

You can buy Kyber Network (KNC) through the gate.io:
1. Create and verify your account on gate.io

2. Fund your account with cryptocurrency, USDT, BTC, or any other known cryptocurrency.

3. After which, you can move to the trading section and purchase as many KNCs as you want.

source: gate.io

Closing Thoughts

As a decentralized platform, Kyber Network(KNC) offers liquidity by combining funds from various sources. It permits the swapping of cryptocurrencies by users without the use of any intermediary. The network aims to establish itself as a pioneer in the DeFi community for enabling reserve liquidity through its features and operations. Also, the network's growth trend is gradually rising due to instant token exchanges. As the network's value to the Defi ecosystem grows, so will the trading volumes of the protocol and demand for the KNC token. This suggests that the KNC's future will be favorable.

Author: M. Olatunji, Gate.io Researcher
* This article represents only the views of the observers and does not constitute any investment suggestions.
*Gate.io reserves all rights to this article. Reposting of the article will be permitted provided Gate.io is referenced. In all other cases, legal action will be taken due to copyright infringement.

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