Welcome to our Kyber Network Review.
Kyber Network is a decentralized Cryptocurrency exchange based in Singapore. It was founded in 2017 by Loi Luu, Yaron Velner, and Victor Tran, with the sole aim of providing a decentralized environment where users can instantaneously exchange and convert their digital assets with minimal fuss.
Additionally, Kyber Network gives its users the ability to accept payments in various tokens through its payment APIs and contract wallet, a development that will rapidly improve the usability of altcoins while furthering their global adoption.
In this Kyber Network Review, I will examine the progress they have made so far, the challenges they might face on their quest to actualizing their aims, and what differentiates them from similar projects such as Ox Project, Bancor, and the newly budding Dexage Project.
Why Create Decentralized Exchanges?
The founders of Cryptocurrencies dreamt of financial decentralization, a situation where financial power is put in the hands of everyone as against the common practice where large organizations controlled and determined what happens to everyone’s finances.
Centralized exchanges come with a myriad of inadequacies and threats to users’ finances.
- Their centralised nature makes them vulnerable to cyber attacks
- They add cost to users in the form of transaction fees
- Delayed transaction times
- There have been cases where user’s wallets have been locked without prior notice, leading to loss of funds.
Decentralized exchanges are a new development intended to rectify the flaws that have been identified in centralized exchanges.
However, decentralized exchanges have their own flaws and challenges; most notable of them is a lack of liquidity (not enough cash-flow to fulfill orders at every given time), and the high cost incurred from modifying trades in their on-chain order books.
How Kyber Network Tackles These Challenges
It is only logical that new projects learn from the challenges faced by old projects with similar motives and intentions.
The team behind Kyber Network identified the issue of liquidity and on-chain trade modification and proffered a solution.
They use a reserve system as an alternative to the order book.
This reserve system provides high liquidity at all times, allows for the instant transfer and exchange of any cryptocurrency, even across platforms while limiting cost.
Kyber Network Review: Background Info
Kyber Network started out with a testnet launch in August 2017 which was followed closely by its token sale in September 2017. The token sales raised a total of 200,000 ETH (valued at $60 million at the time).
The success of Kyber Network’s token sale led to the launch of its mainnet pilot in February 2018, which ran all the way through April 2018 and culminated in its public beta.
Furthermore, the Network runs on Ethereum’s Mainnet and enjoys the backing of Vitalik Buterin (Founder of Ethereum) who is himself part of the project (Advisory role).
How Kyber Network Works
Kyber Network is both an exchange and a cryptocurrency transfer mechanism. It is a transfer mechanism because users can send any token of their choice into another token’s wallet.
For instance, I can send OmiseGo (OMG) to someone who wants Request Network (REQ), the network instantaneously converts my OmiseGo (OMG) to Request Network (REQ) before it hits the receiver’s wallet.
The best part is, you don’t have to wait for confirmations or make any deposits.
Furthermore, Kyber Network is able to maintain liquidity through its reserve pool. The pool is made up of multiple entities to prevent monopolisation while maintaining competitive exchange rates.
All transactions on the network are executed on the Ethereum Blockchain and overseen by Kyber Network’s operators.
Kyber Network Token (KNC)
Kyber Network has a utility token (KNC) just like Binance’s token (BNB).
The KNC has a total supply of 215,625,349, out of which the general public holds 60%, Kyber Network holds 19.5%, while its advisors, founders and seed investors hold 19.5%.
The token is useful in 2 ways.
- Reserve Managers use it to pay platform fees
- It serves as a way of incentivising partners and other associates who help the course of the Network by attracting traffic, educating potential users and generate volume on the Platform.
The following tokens were listed on its Mainnet launch.
- Aelf (AELF)
- Basic Attention Token (BAT)
- Decentraland (MANA)
- Gifto (GTO)
- Power Ledger (POWR)
- Status Network (SNT)
It is understood that more tokens will be added as the platform scales up.
Kyber Network Fees
Being a decentralized exchange, the platform will charge minimal platform fees.
On the Ethereum Network, for instance, users will only pay the gas fee of their transaction.
That’s it; there are no hidden or additional charges that we know of.
Kyber Network’s Security
Kyber Network hasn’t divulged details to its security framework.
However, it is worth mentioning that decentralized exchanges eliminate the risks that come with involving third-party elements in financial transactions and storing sensitive information (such as private keys) in centralized locations.
The Network has no access to user’s wallets or funds. All transactions are executed on the smart contract, and users can import their wallet address from different sources and even from hardware wallets such as Trezor and Nano S.
What People are Saying About Kyber Network
Kyber Network’s partnership with organizations such as ICON, Wanchain, and CoinManager has won them a lot of attention.
People believe the idea of a decentralized exchange is the missing Ying in cryptocurrency’s Yang, and hence considered a welcomed development.
Users who have experienced the network in action talk about its user-friendliness, while the ability to directly connect a hardware wallet to the network hasn’t fallen short of praises.
However, since the network is still in its infancy, it’s hard to tell if it will fully deliver on its promises in an ever-changing world.
The idea of a decentralized exchange has led many to their drawing boards, with the aim of cooking up the perfect crypto-exchange solution. One of such projects is Kyber Network.
The major advantage this project has over its older competitors is its ability to offer instant transactions while charging minimal fees. Whether it fully delivers on its promise of security, speed and liquidity are left to be seen.
However, there is still a lot of work to be done, and it will be a pleasure to see it develop while maintaining public support in a competitive ecosystem.
Other similar projects such as DEXAGE are bringing forth their innovative ideas. These projects seek to provide even better solutions to what Kyber Network provides – The race to the best decentralised crypto-exchange solution is On!
We are in for a treat.
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