Kyber Network is one of a rising number of DeFi cryptocurrencies attempting to create a viable alternative to established exchanges for consumers to purchase and sell crypto assets. Their exchange is powered entirely by code, a distributed network of software users, and the Ethereum blockchain, rather than a single firm. To that end, the Kyber team has created three Ethereum-based tools: a protocol for decentralized exchange, an application programming interface (API) for asset conversions, and the KNC coin, which allows users to manage their own maintenance and operations.

These capabilities have already contributed to the establishment of KyberSwap, a decentralized exchange application that allows users to swap crypto assets without the necessity of a central order book or operator. Instead, conversion rates for accessible assets are integrated directly into the protocol, which means that users only pay fees in ether (ETH) for performing trades that settle on Ethereum. The Kyber Network Crystal (KNC), Kyber Network's cryptocurrency, is then used to pay for crucial tasks outside of the exchange, such as voting on changes to the software's regulations.

History

Loi Luu, Victor Tran, and Yaron Velner established Kyber Network in 2017. The Kyber team raised 200,000 ETH (roughly 50 million USD) in an initial coin offering for their KNC cryptocurrency at the time. A total supply of 226 million KNC was generated during the auction, the majority of which were sold to purchasers and investors. The Kyber Network destroyed around 10 million KNC tokens in October 2017, reducing the maximum supply to around 215 million KNC. In February 2018, the program became live on the Ethereum blockchain. Kyber Network had over 1 billion USD in total volume from over 1 million user transactions as of July 2020.

How does it work

Kyber Network has components, which are:

Smart Contracts - These provide the foundation for token trading and exchange.

Reserves - These provide liquidity to the network.

Takers - Perform deals and remove liquidity from the network. (Dapps, suppliers, and wallets are among examples.)

The Kyber Network is reliant on reserves for liquidity. There are three types of reserves that provide takers the chance to convert tokens instantly at the best price:

Price Feed Reserves (PFR) - operate as the protocol's alternative to market makers, calculating conversion rates from price feeds and storing this data in smart contracts. Takers are then sent to the smart contract to compute token conversion rates.

Automated Price Reserves APR - serve as liquidity for the network and rely on smart contracts to provide rates for available tokens. The Kyber Network blockchain is utilized for all APR transactions, and smart contracts are used to hold tokens and trade them with other users.

Bridge Reserves oversee increasing liquidity by gaining access to other decentralized exchanges.

Total supply and circulation

Total supply of KNC is 29,26 million tokens, while maximum supply is set to 226 million coins.