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Liquidity is the heartbeat of decentralized finance (DeFi). When there’s adequate liquidity, the market is healthy, functional, user-friendly and active. As such, Kyber Network is out to provide a deeply liquid, decentralized trading space where users can quickly and easily interact with DeFi platforms and applications without an intermediary.
Its mission is to become a key liquidity hub to power the fast-growing decentralized economy of DApps, NFT markets, token swaps and other crypto components.
Find out why Kyber Network makes DeFi tick.
Kyber Network is an innovative, decentralized multi-chain liquidity protocol that aggregates liquidity from various exchanges to provide DeFi users with the best rates.
Founded in 2017 by Loi Luu and Victor Tran, Kyber Network managed to raise 200,000 ETH (roughly over $60 million at the time) through an ICO for its native token, KNC.
Following a successful launch on Ethereum in 2018 with Vitalik Buterin as its key advisor, the Kyber team opened up its infrastructure hoping to rope in the larger decentralized economy.
It's on the backdrop of innovation that Kyber Network developed its flagship product, KyberSwap, a multi-chain decentralized exchange (DEX) aggregator and automated market maker (AMM) that lets you execute token swaps without going through a centralized third party.
KyberSwap aims to foster better collaboration in the DeFi space, and has achieved precisely that with over 10 supporting networks — whereas the top decentralized crypto exchange, Uniswap, only supports only five networks.
Governed by KNC holders through KyberDAO, the network’s decentralized autonomous organization, Kyber Network is community-driven, with reputable projects backing its staking program.
Kyber Network operates as a multi-chain smart contract platform that uses a dynamic reserve model to provide liquidity and takers to execute trades. The platform provides a thriving ecosystem where decentralized applications (DApps), traders and liquidity providers (LPs) can seamlessly transact and earn from countless tokens.
Using Kyber’s on-chain framework, developers can easily integrate other protocols into their applications without permission using smart contracts. This way, applications can accept payments in their preferred cryptocurrency, even when users don’t hold the token native to the blockchain.
With Kyber, traders can instantly and securely swap tokens with no need for sign-ups, intermediaries or trading limits.
As Kyber’s flagship project, KyberSwap is strategically using its advanced features to fuel and empower various users in the DeFi ecosystem, including traders, LPs and developers.
As a DEX aggregator, KyberSwap analyzes rates across thousands of exchanges to provide its traders with the best rates. Kyber ensures high-quality, accurate price feeds on KyberSwap through its partnership with Chainlink, a leading oracle network.
KyberSwap also concentrates liquidity from the industry’s leading liquidity protocols, which allows LPs to earn from their crypto assets. Its two main protocols are KyberSwap Classic Protocol and KyberSwap Elastic Protocol.
Kyber uses an innovative, developer-friendly reserve system to provide liquidity for its DeFi users. Through these unique market-making reserves, developers can deploy smart contracts that cater to diverse liquidity needs. Once a taker initiates a trade, the protocol scans the network to find the best price and uses that reserve to provide liquidity.
The three main types of Kyber Reserves that cater to the different types of LPs are:
Designed for professional on-chain market makers (MMs), Kyber’s Fed Price Reserve (FPR) allows them to generate profits on-chain through a gas- and capital-efficient market-making mechanism.
FPR’s unique architecture lets professional MMs tailor their algorithm, customize their trading strategy and work within their desired risk exposure.
Compared to other market-making options — such as AMMs and traditional order books used by centralized exchanges — FPR is dynamic and flexible, with practical risk management tools. It also doesn't require liquidity capital lockup.
The immense benefits of the FPR model are shown below:
Kyber’s APR is designed for token teams or large token holders who want to be LPs on the network. APR provides a flexible pricing system that can be automated with a preset algorithm, or tailored to suit the current market conditions.
You’ll enjoy massive exposure to the DeFi ecosystem for your listed tokens with APR, which is already used by solid token projects such as Synthetix and Gnosis. With APR’s efficient use of token inventory, you can expect better liquidity and spreads with low slippage, even for large orders.
Here are some benefits of the APR design:
While Federal Price Reserve and Automated Price Reserve work solely on Kyber, Bridge Reserves (BR) brings in liquidity from other on-chain liquidity sources, such as Uniswap, Oasis Network and Bancor.
The key benefit of BR is to allow takers and DApps to use the Kyber protocol as a single liquidity endpoint, which saves time and costs compared to integrating multiple systems. BR liquidity pools even offer zero liquidity fees, ensuring the best average token rates — no matter what on-chain pool the liquidity is taken from.
KNC is the utility-enabled governance token for Kyber Network. It not only interconnects all the stakeholders in the Kyber ecosystem, but it can also be used to transfer value beyond. KNC is a dynamic token you can upgrade, mint or burn, giving it the flexibility to better support the liquidity and growth of the network.
As a governance token, KNC is staked by holders who can also vote on KyberDAO’s governance platform to receive trading fees. KNC is also used to incentivize and provide more value to LPs, above the trading fees they receive. Additionally, KNC can be used as collateral for loans and margin trading on DeFi platforms such as Aave.
Other use cases for KNC include facilitating crypto payments on platforms such as Monolith wallet and Pundi X.
Kyber Network’s vision is to provide a solid infrastructure that caters to the liquidity needs of the entire DeFi family. With over 100 DApp integrations and over $10 billion in total trading volume, Kyber has taken a strategic position in the ever-expanding and fast-paced DeFi movement.
Since 2021, KNC’s price has been relatively stable, trading within a range of $1 to $2 for most of 2021. In February 2022, it broke a key resistance level at around $2.20, and continued on an upward price trajectory that culminated in its highest price of $5.70 at the end of April.
However, Kyber’s price dropped sharply from this all-time high the following month, and has been trading sideways since then. Expert analysis from WalletInvestor predicts that KNC will remain bearish for years to come, falling to below $1 by 2027.
Additionally, technical analysts at Price Prediction don’t foresee an aggressive price growth rate for KNC, predicting the token will continue to trade sideways for most of 2023 and may reach around $3 in 2024. The platform is bullish on KNC for the long term and believes it could hit $20 by 2030. DigitalCoinPrice also foresees similarly modest growth for Kyber to around $16 by 2030.
That said, it’s important you research any token before investing in it, since the crypto market is highly volatile and unpredictable.
You can buy KNC on leading cryptocurrency exchanges, such as Bybit, which offers USDT perpetual trading for the token. Simply create an account on Bybit and go to the derivatives page to trade KNC.
Liquidity is instrumental to the growth of DeFi, and Kyber Network is innovatively leading the way toward becoming a trust-minimized liquidity hub. Its unique Kyber reserve models and protocol design places it as a strategic liquidity infrastructure provider for a decentralized economy.
As the DeFi landscape continues to evolve, Kyber is constantly building to integrate more DApps and add more assets for a seamless token-swapping experience.