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What is Kyber Network?
To understand why I have dubbed Kyber Network the “DeFi Standard”, we must first understand what Kyber is. The video below does an excellent job simply explaining just that.
What is the difference between Kyber Network and Kyberswap?
A common misconception in the Kyber ecosystem. There are some key differences between them, let’s review:
Kyber Network: on-chain liquidity protocol that enables decentralized token exchange in any integrated DApp. Permissionless integration.
KyberSwap: crypto trading DApp on Ethereum, one of over 100 DApps using Kyber Network’s protocol. Allows traders to swap erc20 tokens in a fast, simple, and secure way. No KYC, no limits.
A Truly Decentralized Exchange (DEX)
We have all read horror stories online about users attempting to withdraw, sell, or purchase rather large sums of cryptocurrencies and being slapped with KYC, their account becoming immediately locked and subsequently their funds. Not only should this terrify the user, it goes against what cryptocurrencies are fighting for; financial sovereignty & privacy.
In order to access the Kyber Network, you must use an ERC-20 friendly wallet like Metamask, TrustWallet, hardware wallet, etc. Transactions submitted through Kyber operate under Ethereum’s ERC-20 standard. If you decide to sell your 1 Bitcoin for $10,000 worth of DAI via Kyberswap, no one authority can stop that transaction. Further, your funds never leave your wallet.
Kyber’s Key Advantages
Kyber’s key competitive advantage: Its fully on-chain design allows seamless composability/integration with DApps, smart contract-enabled functionality such as flash loans, as well as full transparency and transaction verifiability. These are all not possible with off-chain or hybrid approaches like 0x or IDEX. Kyber also has a wide variety of liquidity provision options, some of which (e.g. the Fed Price Reserve) are not available elsewhere in the DeFi space.
“The main motivation for bridging liquidity from these liquidity providers into Kyber is to ensure that takers and DApps can use Kyber as their single liquidity endpoint, and receive the best possible price (quote) for each trade, versus having to go through the trouble and costs of integrating multiple systems.” – Source
Kyber Network has Defended the Network From Prying Eyes
Kyber has proved it is not afraid to pick up their bags (pun intended) and move countries to protect the network and its privacy. This fact simply cannot be understated. These actions without a doubt showcase Kyber’s integrity and their allegiance to protecting the user’s privacy.
On the contrary, we have platforms like Coinbase.com actively & willingly handing over user information to the DEA and IRS. This isn’t the first time this has happened and it seems Coinbase has long gone over to the dark side. There have been other platforms that you might recall such as Lavabit, or Silent Circle closed their doors under duress of the US Government. Fighting for privacy is of the utmost importance for any crypto project.
DAO (Decentralized Autonomous Organization)
DAO’s allow users within the ecosystem to vote on the network perimeters as well as being rewarded for said participation. In Kyber Networks case, KatalystDAO KNC Stakers will vote on deciding the network fee, how the network fees will be allocated to maximize growth, as well as value creation options.
More information regarding Kyber Networks DAO upgrade can be found here.
Deflationary Staking, Hard Cap Supply & ETH Staking Rewards
Proof of stake, or staking, has been a hot topic lately. DeFi projects like Synthetix Network (SNX) come to mind as it’s quite similar to KNC. One big problem with a lot of staking coins is typically there’s a hefty amount of inflation that comes along with it. This forces the holder to an ultimatum: Participate in staking and be rewarded, or be inflated out of your hold by the staking rewards inflation. Kyber not only has a hard cap on supply, but staking rewards are actually deflationary! Rewards are divvied out in Ethereum (awesome!) and KNC is burned slowly decreasing overall supply. This creates one hell of a feedback loop and doesn’t push speculators who simply want to hold KNC rather than stake it.
As far as I’m aware, Kyber Network is one of the first to implement staking in this manner and the overall design is brilliant.
Free Limit Orders & Free Ethereum Gas
If you hold 2000 KNC (currently worth about $1,700) within your ERC-20 wallet while using Kyber Networks Exchange, your limit orders are completely free, 0% fees. Along with that, ETH gas fees are free as well. This could add up to be quite the savings if you plan to use Kyber Network’s exchange long term.
A few potential downsides: a cap of 10 limit orders per day as well as the verbiage stating essentially this perk could be removed at any time shall the team decide. Hopefully it never comes to that as I believe a lot of speculators believe this is a big perk for investing early in the Kyber Network.
Superb: App / UI / X
Overall, Kyber network does an amazing job of tying it all together for the average user. The Android app is ultra smooth, simple to use, operates well and has seen consistent UX improvements. Download the app, connect your ETH wallet, click the swap button! Easy peasy.
A lot of the same could be said about Kyberswap.com. Personally, I love the portfolio page and have it open 24/7. Platforms like Synthetix Network (SNX) are quite complex comparatively. Another example I can point to is attemping to use the Metamask app on Android while accessing Uniswap.exchange. It works… kind of… undeniably not nearly as fluidly as the Kyber app.
A superb team dedicated to Kyber Network
Kyber network had it’s initial ICO back in April of 2017.
I feel as if the acronym “ICO” has a wretched smell in the air, for good reason too. Most ICO projects were nothing more than vaporware or blatantly exit scammed stealing millions from investors. Kyber Network has truly been a diamond in the rough, slowly becoming increasingly polished since it’s ICO.
3 years later, Kyber is still alive and and well and has implemented ground breaking DeFi programming and has a well rounded product. Hat’s off to the Kyber team.
These are the reasons Kyber should rightfully claim the title: “The DeFi Standard“.