Kyber Network (KNC): A detailed review | Pvot

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kyber network

The Kyber Network, a blockchain-based liquidity protocol, is the subject of today's review. It is intended to provide a long-term solution to the drawbacks of both centralized and decentralized exchanges. Kyber, with its superior technology and one-of-a-kind features, provides users with faster cryptocurrency transactions at a lower cost.

But how does Kyber work its enchantment? You're about to learn. Continue reading to learn more about Kyber and its services.

Let's get started!

What is Kyber Network?

Kyber Network is a decentralized liquidity protocol that collects liquidity for Dapps and facilitates cryptocurrency exchanges without the use of a middleman.

The Ethereum blockchain supports the Kyber network. The network also connects smoothly with other smart contract-based blockchains. It enables the instantaneous trading of ETH and other ERC-20 tokens without the need for registration. Kyber provides liquidity pools (reserves) that include a variety of cryptocurrencies.

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As a result, a user can use the reserve to conduct an exchange through any project. This means that any exchange that interfaces with Kyber Network can allow users or traders to transfer any cryptocurrency while receiving the crypto assets they want, which may or may not be the same as the ones they sent.

Kyber Network, as a decentralized exchange, links traders to liquidity pools rather than an order book. The protocol's smart contracts provide liquidity and allow for transactions to be completed without the use of a third party.

Though Kyber Network's design is unique, its operation is similar to that of other Defi initiatives such as Uniswap, Curve, Balancer, and others.

Despite its resemblance to several other exchanges, Kyber Network has one key characteristic that sets it apart from the rest.

The protocol generates a win-win situation for all of its users. It builds a relationship that allows a huge liquidity pool to be fully utilized by combining several cryptocurrencies. On the Kyber Network Crystal Legacy platform, users may easily trade one token for another.

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What’s Special About Kyber Network?

The introduction of decentralized exchanges in the cryptocurrency world remedied the shortcomings in centralized systems' operations. Increased expenses and taxes, slow transaction rates, indiscriminate wallet locking, and high exposure to insecurity are all situations that have been minimized.

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Decentralized exchanges, too, have its faults. High expenses for trade modifications in order books and a lack of liquidity are two examples.

Liquidity is a critical component of the Defi ecosystem. Most exchanges have struggled to obtain and maintain liquidity. Here's where KNC comes in. Kyber Network collects liquidity from various digital tokens and develops reserves.

Investors can access the reserves at any moment through the Network. As a result, investors and traders who do not have booking orders can trade directly from their wallets. However, the traders will retain custody of their tokens throughout the process.

As a result, KNC facilitates cryptocurrency exchanges. Every transaction using the protocol is presented to the users at a low cost.

Kyber Network is also compatible with other protocols. It's been called a developer-friendly initiative by the crypto community. The protocol that wants to interface with KNC must be built on top of a blockchain that is powered by smart contracts.

Several companies, Dapps, and wallets have already included the Kyber platform in their projects or businesses. SetProtocol, InstaDApp, bZx, AAVE, MetaMask, Coinbase, and others are among them.

How does Kyber network work?

Although Kyber Network is a decentralized exchange, it also serves as a digital asset transfer platform. The Network's operation is adaptable. It distinguishes itself by permitting cryptocurrency exchange. Users can therefore transmit tokens, but the tokens they get may differ from the ones they sent. Kyber Network provides customers with the option of receiving any token of their choosing.

For the tokens sent by users, the network relies on on-chain conversion. As a result, the assigned tokens reach the receiver's wallet without the need for an intermediary.

Kyber Network operates by creating a single reserve liquidity pool on its platform. It combines liquidity from many sources. Market makers, token holders, decentralized exchanges, and others are among them. As a result, liquidity might come from anyone.

Vendors/Investors, crypto wallets, and decentralized applications are the three main users of Kyber Network. These users can effortlessly exchange tokens without the need for network intermediaries.

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The Kyber Network functionality is based on three mechanisms. These are the ones.

  • The Reserve Mechanism - Kyber Network delivers infinite liquidity with its reserve. KNC builds a liquidity pool with excellent security by aggregating from other sources. The network keeps track of all transactions through its reserve by employing a transparent fund management methodology.
  • The Swap Mechanism - This explains how cryptocurrencies can be exchanged instantly without the use of order books, deposits, or wrapping. This is useful in firms where transactions must be confirmed prior to providing services or releasing items.
  • The developer-friendly Mechanism - The network draws various projects because it is a developer-friendly protocol. Dapps, DEX, and crypto-wallets are examples of projects that use some tools and documentation to integrate into the Defi ecosystem.
Overview of Token Swap in Kyber Network. Image via Whitepaper

Regardless of the processes involved, each transaction is completed as a single blockchain transaction. As a result, with Kyber Network, transaction executions are complete and on the blockchain. On the network, there is no room for partial transaction execution. Transactions, on the other hand, maybe reversed.

In addition, the Kyber Network is based on transparency. When you query the smart contracts, you can quickly verify all of the currency rates from the reserves.

The usefulness and transparency of Kyber Network account for why various Defi platforms, crypto wallets, and Dapps want to integrate it. It provides users of these platforms with unrivaled token conversion and swap capability.

History of Kyber Network

Loi Luu, Yaron Velner, and Victor Tran created the Kyber team, which is based in Singapore. Luu was previously a co-founder of SmartPool, a decentralized mining pool initiative, and the author of Oyente, the first open-source Ethereum contract security analyzer.

In addition, the company has attracted Ethereum founder Vitalik Buterin as one of its advisers, as well as an experienced and skilled advisory staff.

Victor Tran has taken over as CTO of Kyber Networks, which was formerly held by Yaron Velner. He's worked on a number of high-performance multi-platform apps. Victor, a lead engineer of the SmartPool project, has been working on blockchain and cryptocurrency development since early 2016.

Kyber Network Trading Fees

The only fee levied by the Kyber Network is a 0.10% flat trading fee.

Final thoughts

Kyber Network is a decentralized cryptocurrency exchange that offers a variety of extra services to investors, traders, institutions, and developers. Users can stake crypto for passive income liquidity provide prizes, farm tokens, or pool resources in addition to just swapping tokens. Kyber Network is a strong contender in the DEX market, with minimal fees and a simple platform, and its non-custodian, anonymous structure will appeal to many. Newcomers to crypto trading, on the other hand, will need to purchase tokens from an entry-level exchange before using this platform.