Kyber Network (KNC)An On-Chain Liquidity Protocol That Allows Decentralized Token Swaps.
- Kyber is an on-chain liquidity protocol that aggregates liquidity reserves to allow instant and secure token exchange in multiple decentralized applications (dApps). In 2019, Kyber ranked as the most widely used DeFi application on Ethereum.
- Unlike other protocols, Kyber Network is fully built on-chain, without any off-chain component, and allows instant settlement of token-token transactions (e.g., MANA to BAT).
- At its core, the Kyber Network interacts with a system of reserves, i.e., liquidity pools, working as pre-automated market-maker on the blockchain. There are three types of reserves: Price Feed Reserves (work with an off-chain component), Automated Price Reserves (built on an automatic algorithm within a smart contract), and Bridge Reserves (permissionless third-parties e.g., Uniswap, Bancor).
- Kyber Network is an implementation of the Kyber protocol on Ethereum. It is by far the most used implementation of the protocol. However, the Kyber protocol itself has been deployed in alternative blockchain like EOS (YOLOswap) and TomoChain (TomoSwap). In addition, the project team has been working on cross-chain protocol like Waterloo to allow EOS/Ethereum token swaps.
- The Kyber Network Crystal (KNC) token is an ERC-20 token running on Ethereum used to connect multiple participants in the Kyber Network ecosystem, including both liquidity contributors and different entities building on the protocol. For instance, to operate and provide token liquidity, third-party token reserves are required to use KNC to pay for their operation in the network as Kyber Network charges transaction fees in KNC from these reserves.
1. What is Kyber Network (KNC)?
Kyber Network is an on-chain liquidity protocol that can be used for a wide variety of inter-token use cases. The protocol allows decentralized token swaps to be integrated into any application, enabling value exchange to be performed between all parties in the ecosystem. Using this protocol, developers can build innovative payment flows and applications, including instant token swap services, ERC-20 payments and financial DApps.
The project's mission is to make any tokens "usable anywhere and become the transaction layer for the decentralized economy".
Some of its key features include:
- On-chain settlement: atomic and immediate on-chain settlement.
- Trustless transactions: trustless and transparent transactions.
- Ease of use: the bundling of multiple value exchanges into a single step for users.
- Seamless integration: straightforward integration with dApps, as interaction with off-chain components is not needed and there is minimal security and development overhead.
Source: Kyber Network Management Team.
Compared to its competitors, Kyber Network's differentiation points include:
- Instant confirmation: unstant confirmation for transactions sent from on-chain entities such as smart contracts.
- Operation certainty: users know the rate and available liquidity prior to transaction execution and settlement.
- Lack of counterparty risk: Kyber does not custody or control users' funds; all operations that occur on the Kyber protocol can be publicly verified on the blockchain.
KNC (Kyber Network Crystal) is an ERC-20 token that is used by reserve managers to pay transactions fees required to execute trades (operate a reserve) and awarded to third parties for generating trade volume. Kyber charges a small fee in KNC each time an exchange happens on the network, then burns the KNC tokens collected as transaction fees.
Over time, as more trades are executed, additional fees will be generated and more KNC tokens will be burned, reducing overall token supply.
Source: Kyber Network Management.
Some of its use-cases include:
- Decentralized token swaps: users can conduct decentralized token swaps on websites such as CoinGecko, KyberSwap and Easwap, or within their own wallets such as imToken, MyEtherWallet, Trust Wallet and Coinbase Wallet.
- Payments: users can pay for goods and services with any ERC-20 token Kyber supports, while the vendor can receive payment in their desired token. For example, on Etheremon, players can catch monsters and pay for services with ERC-20 tokens, entirely within the game.
- Decentralized finance (DeFi): index funds and financial dApps such as Melonport and Betoken can leverage Kyber's protocol to liquidate or rebalance their portfolio in a seamless, transparent and verifiable way. In addition, exchanges (both centralised and decentralised), traders and arbitrage bots can use the Trading API to leverage the liquidity offered on Kyber to match orders, or to arbitrage for profit.
Various platforms and use-cases exist that can leverage Kyber's liquidity protocol, such as wallets, websites, vendors, trading programs and DApps. Projects powered by Kyber include the following:
Source: Kyber Network Management
One such platform is Kyber's end-user retail product, KyberSwap on Ethereum. KyberSwap is a simple and secure token swap platform. Users can instantly convert ETH to ERC-20 tokens, or one ERC-20 token to another through KyberSwap, with no deposits or order books. Similar implementations exist on EOS (YOLOswap) and TomoChain (TomoSwap). In addition, the team has also been working on cross-chain protocol like Waterloo to allow EOS/Ethereum token swaps.
2. Economics and supply
|Private Sale Allocation||33.55% of Total Supply|
|Private Sale Token Price||$0.375|
|Private Token Sale Date||15 Aug 2017|
|Private Sale Amount Raised||$27MM (104,054 ETH)|
|Public Sale Allocation||26.70% of Total Supply|
|Public Sale Token Price||$0.44|
|Public Token Sale Date||15 Sep 2017|
|Public Sale Amount Raised||$25MM (195,946 ETH)|
Thee token supply distribution is as follows:
- Private Sale & Early Investor tokens all unlocked in September 2017 (74,803,953 KNC). It was completed on 15 Aug 2017 for 72,352,094.23 KNC at a rate of 695 KNC = 1 ETH, raising 104,054 ETH at ~$0.375 per token, selling 33.55% of total supply.
- Public Sale tokens all unlocked September 2017 (57,568,314 KNC). It was conducted on 15 Sep 2017 for 57,568,314 KNC at a rate of 600 KNC = 1 ETH, raising 95,946 ETH at ~$0.44 per token, selling 26.70% of the total token supply.
- Team and Advisor tokens (41,982,255 KNC) will be vested over 2 years with a one year lockup (16,070,001 KNC unlocked September 2018) and then released quarterly beginning in December 2018 (4,017,500 KNC released quarterly through September 2019); 9,842,253 remaining team tokens are reserved for new team members and will be issued & unlocked as needed.
- Reserve tokens will be used on an ongoing basis to fund operations (42,580,754 KNC); 800,000 reserve tokens were released in September 2018.
KNC token supply distribution
2.1 KNC token release schedule
The tokens and ETH raised are stored in multi-signature wallets, and the private keys are held by co-founders and advisors.
KNC token release schedule
3. Roadmap, updates, and partnerships
3.1 Initial roadmap
Kyber has successfully completed all of their key announced milestones within the communicated timeframes. The project has also recently shared an updated roadmap with key milestones through Q2 2019.
|2019:Q2||Release of working MVP of Kava CDP system||Medium|
|2019: Q2||Release of public testnet 1.1||Medium|
|2019: Q2||Kava Founder Rewards Program to incentivize users to run validator nodes||Github|
|2019: Q2||Release of public testnet 2000||Github|
|2019: Q4||Release of public testnet 3000||The final public testnet before mainnet|
|2019: Q4||Mainnet launch||N/A|
|2019: Q4||Release of Beta CDP System||Available for developers to use at HackAtom DeFi in San Francisco|
|2019: Q4||Implement on-chain vesting for validators||Github Pull Request|
|2020: Q1||Public testnet 4000 with Beta CDP system and Bug Bounty Program||First cross-chain assets integrated into CDP system on testnet|
|2020: Q2||Cross-chain assets in CDP system on mainnet||N/A|
|2020: Q2||Integrate custodial BTC Peg into CDP system testnet||N/A|
|2020: Q3||Integrate both custodial and non-custodial BTC Peg into CDP system mainnet||N/A|
3.2 Updated roadmap
- Coordinated with BitGo and Republic Protocol to launch WBTC.
- Launched Kyber Trading REST API.
- Developed Automated Market Maker reserve and permissionless orderbook reserve functionality.
- Release WBTC, to be used as a means to promote liquidity transfer from Bitcoin to Ethereum, and vice versa.
- Permissionless reserves that will allow users to list any tokens without asking for approval.
- Support for advanced financial instruments like options and fixed income products.
- Creating a DAO for governance around the protocol that will be accomplished via several iterations.
3.3 Commercial integrations
- Wallet integrations:
- Coinbase Wallet.
- Trust Wallet.
- KyberWidget: Enables payments in ERC-20 tokens on DApps and websites; CoinGecko is the first project utilizing the KyberWidget.
- Etheremon: Integrated with Etheremon, a popular decentralized virtual monster game, to enable users to pay for monsters in supported ERC-20 tokens.
- Decentraland: Integrated with Decentraland, the decentralized virtual reality platform, giving LAND purchasers the option to pay in various ERC-20 tokens during the LAND auction.
- Melonport: Integrated with Melonport, allowing fund managers to leverage the liquidity provided by Kyber. Users are also able to rebalance their Melon fund portfolio using Kyber in a transparent and verifiable manner.
- WBTC: Announced the Wrapped BTC initiative with founding partners that include BitGo and Republic Protocol.
4. Project team
Kyber has 48 employees, 32 of which are developers. Key staff members are shown below.
Head of Development
Head of Compliance
Head of Product
Furthermore, Kyber has 6 advisors that can be found in the Appendix.
5. Kyber's activity and community overview
5.1 Social community and strategy
Kyber Network has a global reach with social communities in many languages and a growth strategy that is driven by 3 main pillars:
- New token listings to provide additional liquidity.
- Integration with vendors, wallets, DApps, and reserves.
- Participation in conferences and meetups to target developer communities.
Kyber is currently focused on growing a community of developers who can build useful decentralized applications (DApps), platforms, and products that leverage its liquidity protocol. To achieve this, Kyber has created a developer portal with the necessary documentation and tools for seamless integration. In addition, Kyber has targeted key developer touch points, sharing information about the protocol at various hackathons and tech events such as ETHGlobal, DevCon, and BlockchainEXE. Kyber is also participating in the Future of Blockchain hackathon, educating student developers from Cambridge, Oxford, Imperial, LSE, UCL, and KCL.
For the non-technical community, Kyber works with integrated projects and token teams to run joint community engagement campaigns that both educate and reward members. As an example, Kyber has collaborated with Etheremon (blockchain game) and CoinGecko (data aggregator) for community giveaways, via outreach channels such as Telegram, Reddit, Twitter and others. Additionally, promotional materials are translated into different languages (Chinese, Korea, Japanese, and Vietnamese) to address global user bases This strategy is designed to continuously share content around integrations that reinforce the direction of the protocol.
Kyber has a global and diverse community, with over 135,000 followers across social media platforms including Telegram, Twitter, Medium, Reddit, WeChat, and Facebook.
5.2 Development activity
5.3 On-chain activity
6.1 Additional product detail - demo & screenshots