Kyber Network Review: Why Should You Invest in KNC Tokens
The recent boom in cryptocurrency resulted in the emergence of several decentralized exchanges (DEX) in Defi. Due to the rise of many exchanges, the challenges associated with the fragmentation of liquidity rose too.
Presently, there are many digital assets hosted on several liquidity protocols and decentralized applications. These crypto assets will certainly create liquidity, but it hasn’t been easy to swap from one token to another.
There comes the role of Kyber Network Crystal Legacy. Through its operations, Kyber Network Crystal Legacy enables easy swapping among different tokens in any wallet. This swapping happens without any intermediary. Also, the network gathers liquidity from several platforms and presents them in a single network.
Through this Kyber Network Crystal Legacy review, we’ll take a closer look at Kyber Network, its token, and its operations on the Defi ecosystem through the Ethereum blockchain.
What is Kyber Network?
Kyber Network Crystal Legacy is a decentralized liquidity protocol that aggregates liquidity for Dapps and allows the exchange of cryptocurrencies without any intermediary.
The Kyber network Crystal Legacy is based on the Ethereum blockchain. The network also integrates seamlessly with other blockchains that operate with a smart contract. It allows the immediate exchange of ETH and other ERC-20 tokens without any registration wherever. Kyber offers liquidity pools (reserves) from diverse cryptocurrencies.
So a user through any project can conveniently utilize the reserve to make an exchange. This means that any exchange that integrates with Kyber Network Crystal Legacy can allow users or traders to send any cryptocurrency but receive the crypto assets they prefer, which might differ from those they sent.
As a decentralized exchange, Kyber Network Crystal Legacy connects to traders through liquidity pools and not an order book. The protocol’s smart contracts contain liquidity and consummate transactions that occur without an intermediary.
Though Kyber Network Crystal Legacy has some differences in its design, its operation is similar to some Defi projects such as Uniswap, Curve, SushiSwap, etc.
Despite its similarities with some exchanges, Kyber Network Crystal Legacy still retains its core distinguishing feature from them all.
The protocol creates mutual benefits among its several users. It establishes a relationship that helps to fully utilize a large liquidity pool size by aggregating diverse cryptocurrencies. Kyber Network Crystal Legacy enables users to swap one token with another on its platform conveniently.
History of Kyber Network
Victor Tran and Loi Luu created the Kyber Network Crystal Legacy in 2017. The live shot of the protocol’s test net was in August 2017. In September 2017, the ICO of the network made $60 million. This value is the equivalence of 200,000 ETH.
In February 2018 came the launching of the main net. This main net was available to whitelisted users. Subsequently, the Kyber Network Crystal Legacy opened the main net in March 2018 as a public beta.
Through its operations, the network volumes kept increasing. It rose above 500% before the end of the second quarter of 2019. The increase in the growth of the network has pushed its success story from then.
What’s Special About Kyber Network?
The advent of decentralized exchanges bridged the flaws in the operations of centralized systems in cryptocurrencies. The cases of increased costs and fees, slow transaction rates, indiscriminate locking of wallets, high vulnerability to insecurity all reduced.
Also, the decentralized exchanges have their flaws. These include high costs for a trade modification in order books and lack of liquidity.
To understand what Kyber Network Crystal Legacy does, let’s look more at liquidity in cryptocurrencies. Liquidity can stand for several things as used in cryptocurrency.
Liquidity refers to – The volume of trading in the crypto market.
- The process of exchanging a cryptocurrency without losing its value or price.
- The ability to easily convert a cryptocurrency to cash.
Generally, in the Defi ecosystem, liquidity is an essential tool. Attaining and retaining liquidity has not been easy for most exchanges. This’s where KNC steps in. Kyber Network Crystal Legacy gathers liquidity from different digital tokens and creates reserves.
The Network makes the reserves available to investors at all times. So investors and traders without booking orders can trade from their wallets. But during the process, the traders will still be retaining the custodianship of their tokens.
So KNC enables exchanges of cryptocurrencies. It presents the users with a minimal cost for every transaction through the protocol.
Kyber Network Crystal Legacy also integrates seamlessly with other protocols. The crypto community calls it a developer-friendly project. The protocol that wants to integrate with KNC has to be on a blockchain-powered by the smart contract.
There are already several vendors, Dapps, and wallets that integrate the Kyber platform into their projects or products. Some of them include SetProtocol, InstaDApp, bZx, AAVE, MetaMask, Coinbase, etc.
According to the Networks website, there are already over 100 integrations with the project.
How Does Kyber Network work?
Though Kyber Network Crystal Legacy is a decentralized exchange, it also a transfer platform for digital assets. The Network is versatile in its operation. It differentiates itself by allowing the exchange of cryptocurrencies. Thus, users can send tokens, but the one they receive can be different from the type of tokens they sent. Kyber Network gives them the opportunity of getting any token of their choice.
The network operates through on-chain conversion for the tokens sent by the users. So without any intermediary, the designated tokens get to the receiver’s wallet.
In its operation, Kyber Network Crystal Legacy creates a single reserve liquidity pool on its platform. It aggregates liquidity from different sources. These include market makers, token holders, decentralized exchanges, and others. So liquidity can come from anyone.
The three basic users of Kyber Network Crystal Legacy are Vendors/Investors, crypto wallets, and decentralized applications. These users can easily exchange tokens without the use of intermediaries on the network.
The functionality of the Kyber Network Crystal Legacy revolves around three mechanisms. These are
- The Reserve Mechanism – Through its reserve, Kyber Network Crystal Legacy provides unlimited liquidity. By aggregating from other sources, KNC creates a liquidity pool that boasts of high security. By using a fund management model that is transparent, the network maintains records of all transactions through its reserve.
- The Swap Mechanism – This accounts for the immediate exchange of cryptocurrencies without order books, deposits, or wrapping. This makes it easy in businesses where transactions must be confirmed before services or the release of goods.
- The developer-friendly Mechanism – As a developer-friendly protocol, the network attracts several projects. Such projects include Dapps, DEX, crypto wallets that utilize some tools and documentations to integrate into the Defi ecosystem.
For a clearer understanding of the Kyber Network Crystal Legacy’s operation, let’s examine a typical example in a trade. Since Kyber runs on the Ethereum blockchain, the core asset is ETH (Ether). If you want to trade ETH for KAVA, your transaction will involve the following steps:
- Send in your ETH to the smart contract of the Kyber Network Crystal Legacy.
- The smart contract will query all its reserves to get the best ETH to KAVA exchange rate.
- The contract remits the ETH to any reserve having the best ETH to KAVA exchange rate.
- You will get your KAVA from the reserve.
Where you don’t have ETH but have RLC, your exchange becomes RLC to KAVA. The transaction will include additional steps first to get the core asset, ETH.
- Send in your RLC to the smart contract of the Kyber Network Crystal Legacy.
- The contract queries all its reserve for the best RLC to ETH exchange rate.
- The contract transfers the RLC to any reserve with the best RLC to ETH exchange rate.
- The reserve sends ETH to the contract.
- The smart contract will then query all its reserves to get the best ETH to KAVA exchange rate.
- The contract remits the ETH to any reserve having the best ETH to KAVA exchange rate.
- You will get your KAVA from the reserve.
Every transaction completes as a single blockchain transaction irrespective of the steps involved. So in Kyber Network Crystal Legacy, the executions of transactions are in full and on the blockchain. There’s no room for partial execution of transactions on the network. However, transactions may be reverted.
Also, Kyber Network Crystal Legacy functions on transparency. You can easily verify all the exchange rates from the reserves when you query the smart contracts.
Kyber Network Crystal Legacy’s functionality and transparency account for why several Defi platforms, crypto wallets, and Dapps seek its integration. It gives the users of these platforms the token conversion and swap functionality that is second to none.
Kyber Network (KNC) Token
The Kyber Network Crystal Legacy native/main utility token is KNC (Kyber Network Crystal Legacy). The team launched the KNC token in 2017. The launch was an ICO of about $1 per token. With 226 million KNC for the ICO, only 61% of this value was sold.
The founders/advisors and the company controls the remaining portion in a 50/50 ratio. This control has a lockup period of one year and a vesting period of two years.
The max supply limit for KNC at the time of writing this article on June 18, 2021, is 226 million. The network has over 205 million tokens already in circulation. Its market cap is over $390 million.
The token supports the network efficiently. It creates a connection between liquidity seekers and liquidity providers.
KNC token is the governance token of the Kyber Network Crystal Legacy ecosystem. By staking the tokens, holders can vote for changes on the platform. So the token is classified as a governance token. The staking of the tokens comes periodically in cycles referred to as ‘epochs.’
The measurement of the epochs is in the Ethereun block times and has a time frame of two weeks. The holders get a share of the fees that come from the protocol’s liquidity pools. Holders can also stake the token to value increase and make improvements in adoption rates. This will cause a rise in the project values for its functionality.
KNC also functions as a deflationary token. A portion of the token from fees are burnt. This reduces the overall supply of the cryptocurrency. Deflation invariably impacts positively on the economic flow of the asset.
Also, KNC tokens are needed by reserve managers to maintain their liquidity reserves. This’s because once an exchange transaction is consummated, there a KNC charge on the reserve. However, part of this reserve charge fees is burned periodically.
The protocol made its first burning of 1 million KNC in May 2019. The second burning of 1 million KNC was in August 2019. The analysis shows that the first burning was 15 months from the time of launching. However, the second burning was just three after the first. This indicates a rapid growth and adoption of the protocol.
KNC Price Performance
KNC’s price surged up by doubling just a week after its ICO in September 2017. Though the price later moved back to $1 per token by October, it tripled by December 2017. However, other cryptocurrencies have a better upward flow than KNC during that year-end.
The token experienced its all-time high of $6 per token in January 2019. It then plummeted steadily all year round. It hit its all-time low of $0.113650 per token in February 2019.
The price of KNC is gradually picking up. At the time of writing, the price of KNC is $1.40 per token. Though the current price is more than a 1,600% increase from its all-time low, it is still far from the all-time high price.
The analysis of the price shows a fluctuation in the price. However, its believed that the price will positively turn when the company resumes the protocol’s rally.
Buying KNC tokens
KNC has gained popularity and is listed on several exchanges. You can buy KNC tokens from the listed exchanges such as Binance, Okex, Huobi, and Coinbase Pro. While Binance has wider access to users from many countries of the world, Coinbase Pro is based in the U.S.
There’s a spread in the trading volume of the digital asset at the listed exchanges. This means the liquidity of the network has no dependence and concentration on a single exchange. Also, every exchange book gives you decent liquidity and easy order execution. For instance, you will get wide books with Binance BTC/KNC as well as decent turnover.
You can also buy KNC tokens through KyberSwap. You’ll first buy ETH using your credit card. Then make an ETH to KNC swap.
Storing KNC Tokens
As an ERC-20 token, you can conveniently store KNC tokens in any Ethereum compatible wallet. Such wallets that support ERC-20 include MetaMast, MyEtherWallet, Infinity Wallet, etc. There’s also alternative storage with the Android mobile app, KyberSwap. The team launched the mobile app in August 2019.
Kyber Network Katalyst Upgrade
As an aggregate on-chain liquidity project, Kyber Network Crystal Legacy needs to keep with the liquidity demands of its users. One of the visions of the company is to the top liquidity reserve.
The launch of the Katalyst Upgrade is one of the measures that Kyber Network Crystal Legacy uses to meet its vision. Katalyst is a technical upgrade on the Kyber Network Crystal Legacy that helps to satisfy the liquidity demands in the Defi community.
The Network uses Katalyst as an open ecosystem to get trust from garners on Defi space. It sees Katalyst as a path that will prompt developers, users, and other projects to stick with Kyber Network Crystal Legacy’s liquidity reserve.
Kyber Network Crystal Legacy intends to use the upgrade to form a stronger Defi ecosystem. The upgrade will help it to increase incentives for stakeholders, which will encourage more participation in the Defi community.
From Katalyst operations, the basic beneficiaries and the expected benefits from Kyber Network Crystal Legacy include:
- The KNC token holders – The token holders get a part of the network’s fee by staking their tokens. They also earn when they participate in KyberDAO.
- Reserve managers that provide liquidity – The reserve managers will get two-fold benefits. They will get incentives from the liquidity reserves they provide. These incentives come as a part of the fee collected on the platform as the upgrade becomes operational. The incentives are meant to propel the formation of more reserves as well as market-making. This will increase the demand in utilizing the protocol.
Also, the upgrade plans to remove the use of KNC balance from reserve managers as network fees. This will enable reserves to freely connect to Kyber Network Crystal Legacy and still maintains the exchange rates takers enjoy. Thus, as the network automatically collects the fees, it uses them as incentives or gives them up for periodic burning.
- Dapps connected to KNC – The Dapps that connect with Kyber Network Crystal Legacy will enjoy complete control over their business model. This’s because they can now adjust their spread according to their desire.
Conclusion of Kyber Network Review
Kyber Network Crystal Legacy, as a decentralized exchange, provides liquidity through aggregating from several sources. It enables the swapping of cryptocurrencies by users without the use of any intermediary.
Through its functionality and operations, the network strives to become a leader in the Defi community for enabling reserve liquidity. The growth trend for the network is making a positive increase, especially through instant token exchanges.
As the network’s utility in Defi increases, the protocol gets more trading volumes and KNC token demands. This implies a favorably future for both the tokens and its token. We hope that this Kyber Network Crystal Legacy review has helped you to understand the protocol better.