The Beginner's Guide to Kyber Network (KNC)

Kyber Network (KNC) is a flourishing, fully decentralized platform that is intensifying the potential of DeFi (Decentralized Finance) by offering instant, secure cross-token transactions with exceptionally high liquidity. Kyber Network is focused on reinventing the transfer of value in the digital world, which is significantly different from traditional exchanges like Kraken. Rather than being managed by a single company, its exchange is driven mainly by a robust code, a distributed network of protocol users, and the Ethereum blockchain.

What is Kyber Network (KNC)?

Pioneering DeFi cryptocurrencies like Kyber Network offer alternative solutions to centralized exchanges, allowing users to freely trade crypto assets. Kyber has developed an impressive range of tools to make this possible, which include:

• A protocol for decentralized exchange
• An Application Programming Interface (API) for asset conversions
• The KNC (Kyber Network Crystal) cryptocurrency

These tools have facilitated the launch of KyberSwap, a decentralized exchange application enabling users to swap crypto assets without resorting to an order book or operator. Instead, conversion rates for available assets are built directly into the protocol, with fees in ether (ETH) only charged for trades executed, which then settle on Ethereum.

Kyber Network’s cryptocurrency, KNC, finances vital operations of the exchange, including voting on changes to the protocol's rules.

Who Created Kyber Network?

Kyber Network was co-founded by Loi Luu, Victor Tran, and Yaron Velner in 2017. To finance the network, the team raised approximately $50 million (200,000 ETH) via an initial coin offering (ICO) of the KNC cryptocurrency. A considerable number of 226 million KNC were produced for the sale, the majority of which were bought by customers and investors.

A high quantity of over 10 million KNC tokens was burned in October 2017, bringing the overall supply down to approximately 215 million KNC. The protocol finally went live on the Ethereum blockchain in February 2018.

How does the Kyber Network work?

Kyber Network operates using components that work together to provide a reliable exchange service, including:

• Smart Contracts: They constitute the infrastructure facilitating tokens to be traded and exchanged.

• Reserves: These offer liquidity to the network.

• Takers: They perform trades and withdraw liquidity from the network. Examples range from Dapps (Decentralised Applications), vendors to wallets.

The liquidity of the network is maintained by reserves. When a user initiates a trade, the network searches for reserves to find the best rate offered by takers. This is done using three types of reserves:

• Price Feed Reserves (PFR)
• Automated Price Reserves (APR)
• Bridge Reserves, which can access other decentralized exchanges like Uniswap

Previously, Reserves were required to hold KNC to pay network fees, but an update to the network removed this requirement.

What Makes Kyber Network Unique?

KyberSwap, the main DEX aggregator and liquidity platform of Kyber, provides excellent swap rates for traders in DeFi compared to individual exchanges. KyberSwap sources liquidity from various DEXs, including Uniswap, Sushi, Curve, QuickSwap, Pancakeswap, and many others, maximizing the best rates for traders across different chains.

KyberSwap operates in a decentralized and permissionless manner, not requiring any sign-up or personal information. All transactions on KyberSwap are on-chain, which means transactions do not need a centralized third-party, like a centralized exchange, and they can be easily verified using every blockchain’s block explorer.

Projects can leverage KyberSwap to access its wide array of features, such as the instant settlement of token swaps, liquidity aggregation for the best rates, liquidity pools, and a customizable business model.

KNC: The Lifeblood of Kyber Network

The Kyber Network Crystal (KNC) token is the glue that brings together the various stakeholders within the Kyber ecosystem. KNC token holders who stake tokens in the KyberDAO (a platform that allows community-wide decision-making) can participate in governance by voting on significant proposals, and receive staking rewards filtered from trading fees.