- The Kyber protocol uses reserves to work by using pools of crypto funds.
- KNC holders can stake their tokens to the KyberDAO, which allows them to vote for different proposals
- Kyber protocol supports over 70 different ERC20 tokens.
What is the Kyber network?
A decentralized blockchain protocol that provides the service of exchange of tokens without any interference from third parties. These also provide liquidity for decentralized finance (DeFi).
It is looking forward to providing the services like other networks do instead of being operated by a single company, its exchange is powered solely by a code, a distributed network of protocol users, and the Ethereum blockchain.
The protocol is governed by a decentralized autonomous organization (DAO) called kyberDAO, with participation from holders of its native token, Kyber Network Crystals (KNC).
Kyber Network Work
As of December 2020, Kyber Network has consisted of smart contracts that can be smart contract-capable blockchain through it can be implemented on Ethereum. The protocol aggregates liquidity from various sources, including token holders, market makers, and decentralized exchanges, into a single liquidity pool on its network.
A tale of Kyber Network
In 2017, the Kyber network was launched by Loi Luu, Victor Tran, and Yaron Velner in “the artificial city”, Singapore. And later on, Velner left the Kyber network in 2019. It secured around $ 60 million in funding in its 2017 ICO.
It went live on the Ethereum blockchain in 2018 and raised around 200000 ETH in an initial coin offering of its KNC cryptocurrency. Although the project was started by a team of three and now is fully decentralized. Currently, it is owned by a small group of individuals or companies.
Owning a KNC crypto token means owning a portion of the Kyber Network. Hence, it allows them to take part in governance through the KyberDAO. That is an autonomous decentralized organization that standardizes the process of managing the Kyber Network.
Features of KyberNetwork
It enables any wallet or application to combine immediate token exchange straughts into the user’s application logic. It also allows a broad range of decentralized use cases. It uses crypto funds, known as reserves, to operate itself.
It guarantees that aggregators receive the best pricing, by obtaining liquidity from other liquidity protocols. And over it, the transactions are totally visible and verified.
It is compatible with all decentralized applications and protocols. It provides the service of a fast cryptocurrency exchange to consumers and businesses. Openly available for everyone for developing and monetizing it in an e-commerce platform or mobile application.
Whereas, it charges users for availing services such as trading operations on Kyber Network. To date, there are many cryptocurrencies available or trading without transaction fees. And the Kyber Network lacks an intuitive user face.
Process of creating a new token
The process of receiving a reward by holding certain cryptocurrencies is staking. It allows staking by a consensus mechanism that is known as proof of stake. It is the way to ensure that all the transactions are verified and secured without any interference.