Kyber Network (KNC)

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From the Token Economy (7-2019):

"On the surface, Kyber Network appears similar to Uniswap as both allow users to easily swap tokens. There are, however, some important differences. Kyber offers users liquidity through various reserve pools that are managed by both Kyber and other parties. The user gets the price from whatever pool that offers the best rate. There are requirements for starting a pool and they can be managed in different ways. While on Uniswap anyone and everyone can supply to the same pool and prices are set by a formula. Furthermore, Kyber is making it very easy for other dApps and apps to integrate Kyber into their products."

Basics

History

  • From this interview with Victor, the CEO (3-10-2022):

"Originally KyberSwap was built as the user interface of Kyber Network’s protocol as one of the first DEXs in the world in 2017. Now KyberSwap has evolved to a DEX which focuses on user experience, offering the best rates to users, trading insights, risk management and multiple capital efficient liquidity protocols, all with zero additional or platform fees. Many people in the crypto space believed in our vision, which helped us secure backing from top VCs. We were also fortunate enough to have had Vitalik Buterin as an advisor. These factors contributed to a very successful ICO, allowing us to raise $52M in funding."

Audits & Exploits

  • None according to Blockchain Security DB (29-6-2020), which does show 2 audits (7-2019). Aside from temporary bug bounties offered in 2019 at hackathons, no bug bounty program has been found (15-9-2021). Still not as of 10-11-2022. Shane from Kyber responded saying: "We have bug bounties but they're not widely shared atm. Exploring working with@immunefi" for a more structured programme
  • Scored 56% on DeFi Safety (10-11-2022):

"KyberSwap offers complete coverage of its smart contract functions here. Our research gives out a 300% test to code ratio on the Smart-contracts-master file. There are no explicit detailed reports on test results for KyberSwap. This protocol has not undergone formal verification. Kyber's current version (V3) has been audited by Chainsecurity on Janurary 9th, 2019. All major and critical issues were fixed and most light issues were fixed or acknowledged."

Their Twitter thread went deeper into the score:

"KyberSwap left us in an overall neutral sentiment. Not bad, but not the best either. One thing the dev team knows how to do really well is actual software documentation. Smart contracts and architecture +functions are near impeccable. Testing and security are also rather well covered, with over 300% TtC which shows a very good suite of tests. With a Chainsecurity audit under their belt pre-launch, the audit section receives 90% as well! Our only comment is the absence of a bug bounty.

Admin controls and oracles are where the AMM suffers the most, as some immutable parameters are listed but change capabilities are not described for upgradeable contracts. Furthermore, ownership of contracts could be described more explicitly. No oracle documentation was provided besides frontrunning mitigation, which the team calls “AntiSniping attack”. Using Uniswap v3, we would assume they use an oracle, upon which if that is not the case, clarifications should be provided as well.Overall, Kyberswap provides great information on how the protocol works, which is a great starting point, but is lacking in other crucial information such as what the protocol can do with user funds, i.e. admin controls."

  • Scored a 76% on its v3 (15-9-2021):

"A single audit has been completed this year; the results are public."

  • Previously, Kyber DEX scored a 89% (11-2020); "​Multiple audits were preformed by ChainSecurity on June 29th, 2018, July 9th, 2018, January 9th, 2019, as well as Other audits were preformed by BlockchainLabs.nz, Kyber was made public in July 5th, 2018 and updated in 2020." With the comment: "They tick all the boxes, except maybe a test report."
  • From their blog (2-4-2020):

"Security is our utmost priority, and we are currently undergoing a series of comprehensive smart contract audits for both the KyberDAO as well as a set of crucial new features, including reserve routing, which allows takers to spread their trade across reserves via a fully on-chain mechanism. More details will be shared in an upcoming Technical Update in April."

Bugs / Exploits

"The KyberSwap team has provided an update stating that they have been in contact with the owners of the frontrun bots that extracted about $5.7 million worth of funds from KyberSwap pools on Polygon and Avalanche during the exploit. The team has negotiated with the owners of the frontrun bots to return 90% of the users’ funds in return for a 10% bounty and so far, a total of about $4.67 million worth of funds has been returned to the KyberSwap Deployer address on Polygon."

  • 100 Proof saved $100M at risk in KyberSwap Elastic (5-2023)
  • KyberSwap $256k frontend exploit from two victims, malicious code in Google Tag Manager script (9-2022).
  • A write up of the bug that Sam Sun found in three of Kyber’s bridge reserves can be read here (8-2-2020). "..a Kyber reserve manager smart contract vulnerability discovered by samczsun a few months ago, that opened up the three Kyber-run DEX bridge reserves to a potential attack vector on the Oasis bridge reserve" which got fixed.

Governance

Admin Keys

"Immutable parameters are listed here. However, there are no explicit mentions of upgradeability for other smart contracts. Contract ownerships are not explicitly documented but ownership can be found in the code; for instance, KyberNetwork.sol has OnlyAdmin() ownership, like here. Smart contract change capabilities are not identified. There are no admin control information available. There is no pause control documentation available for KyberSwap. There is no timelock documentation available for KyberSwap."

"Access control information is present, but not well labelled.

a) All contracts are clearly labelled as upgradeable (or not) -- 30% -- the contracts are clearly explained as modifiable.

b) The type of ownership is clearly indicated (OnlyOwner / MultiSig / Defined Roles) -- 30% --- three different ownership groups are clearly identified

c) The capabilities for change in the contracts are described -- 30% -- the capacity for change is explained well using both diagrams and text.

Pause controls are mentioned with details, but there is no documented testing."

  • When asked within their Discord a team member answered (25-3-2021) there was a Network Key with a multisig where 3 holders had to participate to make changes. There is no timelock on this key.

KyberDAO

  • Over 10,000,000 KNC staked on KyberDAO just one day after the launch (9-7-2020). Overall, three days in there are just over 13m KNC staked which represents a little over 7% of the total circulating supply. 
  • From their own blog (17-12-2019):

"KyberDAO to decide on key parameters: We will develop and launch the KyberDAO, giving the community of KNC holders the power to decide how the fees for the network will be used, by voting on the ratio / percentage between burning, staking rewards and maker (reserve) incentives. In the future, the DAO will likely also be able to decide on listing tokens, reserve approvals, and network development grants. We expect key members of the DeFi ecosystem to actively participate in Kyber governance."

"While Kyber has toyed around with DAO ideas in the past, the recent Katalyst upgrade solidified that a DAO will act as a core part of the ecosystem moving into 2020.

Katalyst brings a new token which will not only allow KNC holders to earn network fees by staking KNC, but also participate in governance through the KyberDAO. The KyberDAO will give token holders the ability to decide on how the fees for the network (currently 0.25%) will be distributed between staking rewards, maker/reserve incentives, and the amount of KNC burned."

"We have successfully deployed Katalyst on the testnet and all critical functions are working as intended in this test environment. We are on track for a launch towards the end of Q2."

It does seem to be that the Kyber team will continue playing a leading role in the DAO:

"Given that Kyber is an important part of the decentralized infrastructure, network stability is crucial for the hundreds of DApps and reserves that depend on us. To reduce spamming and abuse, the Kyber team will take on certain key roles, including putting up proposals for voting, protecting against malicious activities, and ensuring any burnt KNC is acquired at a fair price.

It is important to note that changes can be monitored by the community since these operations will be done fully on-chain where feasible. The full set of technical details on what the Kyber team will manage is listed here.

As the current DAO maintainer, we take the role of facilitating discussions, driving open and transparent decision making, and executing (and following through) the formal DAO processes very seriously.

If we perform this balance well, our legitimacy will continue to grow, participation will increase, and the community’s understanding of the key operations will be sufficient to allow us to gradually move more operations towards DAO votes, including network features, technical upgrades or protocol upgrade decisions."

"In the past, Liquidity Providers in the Kyber ecosystem - called Reserve Managers - needed to maintain a KNC balance, which in turn was collected regularly and burnt as network fees. With Katalyst, the need to hold KNC is removed, meaning far more applications and liquidity providers can tap into Kyber at little to no entry cost.

Similarly, Katalyst introduces Reserve Routing, giving traders the ability to pull liquidity from all different Reserves to seed the best token price possible. Supplemented by Rebates, those routing the most volume through Kyber also stand to earn a pro-rata share of 30% of Kyber’s 0.2% protocol fees. This notion of getting ETH-back to use a DEX’s liquidity serves as a strong reason to integrate and encourage usage over competitors with higher rates.

Last but not least, partners can now choose their own spread - removing the previous fee-sharing program in which 30% of the 0.25% fee was kicked back to the provider. This means an application could choose what fee to set depending on their usage. This incentive to determine the spread gives applications the ability to build deeper business models, further propelling the growth of Kyber’s liquidity at large."

"The vote, while relatively simple in its aim, is testing the new Burn, Reward, Rebate (BRR) Proposal Framework on the network. Note, this is separate to the Kyber Improvement Proposal Framework (KIP) which is used for less frequent protocol upgrades. What’s particularly unique about the BRR framework is that it necessitates frequent voting - stakers are able to decide whether the network fee structure is kept the same, or whether a new emphasis should be placed on a particular category (i.e. burn, rebate, reward). In other words, the community can increase a single category by 5%, decreasing the other two categories proportionally.

So far, the community is in favour of increasing the reward category (43% of the vote) with pro-burn coming in second. Note, there is no simple majority nor is it needed. Given the current network fee parameters, this favoured revision translates to a 4.3% of fees being burned, 70% going to rewards, and 25.7% used for rebates. This could be an indication of the community generally preferring KNC to take on more of a cryptocapital asset profile by a stronger emphasis of direct value flows."

  • From their blog (4-8-2020):

"We recently concluded our first KyberDAO Proposal, where the KNC community voted on-chain for the first time on the allocation of network fees that goes towards burning KNC, voting rewards, or reserve rebates (BRR). In just 10 days, 57 Million KNC tokens ($80 million worth) were staked on the KyberDAO, with 2580 voters for the first BRR proposal. More than 630 ETH ($220,000) have also been distributed as rewards to KNC holders who staked and voted. Overall, this is one of the highest, if not the highest DAO participation rate in the Ethereum space! Option B: Pro-Reward, received the highest number of votes. This means that out of the network fees collected in Epoch 2, 4.3% will be used to purchase and burn KNC, 70% will be allocated to voting rewards, and 25.7% will be given as reserve rebates."

How decentralized is it?

  • The following comes from a post (29-10-2019) by competitor Komodo (which is the creator of AtomicDEX), so should be read sceptically:

"The Kyber Network website describes the project as an “on-chain liquidity protocol that aggregates liquidity from a wide range of reserves, powering instant and secure token exchange in any decentralized application.”

The Kyber protocol is a set of smart contracts that provide a decentralized method for performing on-chain token swaps. It doesn’t have order book functionality, so it is technically not an exchange (even if it’s possible to post limit orders). Rather, Kyber is a decentralized version of instant swap services like Shapeshift or Changelly.

In Kyber’s terminology, a reserve is simply someone who provides liquidity. By implementing the Reserve interface, the Reserve (liquidity provider) can register to the protocol’s smart contracts and offer its liquidity for takers (traders who accept existing trade offers) to buy. For now, you need approval from Kyber team to become a Reserve, so it is not a permissionless system. In general, anything that is permissioned is not decentralized. If something is truly decentralized, then there is no authority to prevent people from using it.

The details on how Reserves determine the prices and manage their inventory is not dictated in the protocol and is entirely up to the Reserves themselves, as long as the implementation complies with the Reserve Interface. This can potentially lead to non-competitive markets.

Let’s understand Kyber with an example. Suppose you want DAI tokens in exchange for 1 Ether. First, the Kyber smart contract asks different reserves to get the best exchange price. Then, you’ll see the exchange rate and decide whether or not to go through with a swap. If you proceed, you will send 1 ETH to a Kyber smart contract. Once received, the reserve will do an on-chain exchange and your account will be credited with DAI.

But for Token A—>Token B swaps (where neither Token A nor Token B is Ether), Kyber uses Ether as a proxy token internally (TokenA →Ether→TokenB)."

Kyber Community Pool

"This new Kyber Community Pool does two things:

  1. Collects the pulse of what the Kyber community is thinking about in terms of protocol parameters and upcoming improvement proposals. It collects this pulse through discussions and polls on discord, twitter, telegram and reddit and comes to a consensus view.
  2. Votes in the KyberDAO based on this consensus view and allows any KNC holder to delegate their vote to this pool. This gives KNC holders who do not wish to actively participate in governance votes every two weeks the option to stake-and-forget while continuing to receive their ETH rewards.

You can read more details here and we would like to thank DeFiDude, Wayne, and Sasha for building this."

Kyber Ecosystem Growth Fund

  • Has 42 million KNC to be distributed over 12 months for Kyber’s growth initiatives (2-8-2021).

Token

Launch

Token allocation

  1. Private sale 33.55%
  2. Public sale 26.7%
  3. Team, advisors & early investors 19.47%
  4. Reserve 19.47%
  5. Airdrop 0.81%
  • From Binance Research (as of 7-4-2021, but seems older):

"The token supply distribution is as follows:

  1. Private Sale & Early Investor tokens all unlocked in September 2017 (74,803,953 KNC). It was completed on 15 Aug 2017 for 72,352,094.23 KNC at a rate of 695 KNC = 1 ETH, raising 104,054 ETH at ~$0.375 per token, selling 33.55% of total supply.
  2. Public Sale tokens all unlocked September 2017 (57,568,314 KNC). It was conducted on 15 Sep 2017 for 57,568,314 KNC at a rate of 600 KNC = 1 ETH, raising 95,946 ETH at ~$0.44 per token, selling 26.70% of the total token supply.
  3. Team and Advisor tokens (41,982,255 KNC) will be vested over 2 years with a one year lockup (16,070,001 KNC unlocked September 2018) and then released quarterly beginning in December 2018 (4,017,500 KNC released quarterly through September 2019); 9,842,253 remaining team tokens are reserved for new team members and will be issued & unlocked as needed.
  4. Reserve tokens will be used on an ongoing basis to fund operations (42,580,754 KNC); 800,000 reserve tokens were released in September 2018."

Utility

  • A portion of trading fees are distributed to KNC tokenholders via token burns or dividends for governance participation (Katalyst Upgrade). Kyber V3 is planning to drive even more fees towards the Kyber DAO (21-1-2021).
  • From their blog (10-2-2021):

"The current fee distribution to Kyber Network stakeholders as decided by the KyberDAO in the latest epoch are as follows:

  • 6.2% burn (% of ETH rewards converted to KNC and burnt)
  • 67.32% reward to KNC stakers who vote in the KyberDAO (rewarded in ETH)
  • 26.48% rebate to FPR liquidity providers (rebate in ETH)"

Token Details 

"The native token of Kyber is called Kyber Network Crystals (KNC). All reserves [pools] are required to pay fees in KNC for the right to manage reserves. The KNC collected as fees are either burned and taken out of the total supply or awarded to integrated dapps as an incentive to help them grow." 

"KNC tokens are used to pay token exchange fees where a portion of the KNC is burned and permanently removed from the circulating supply, the remainder is distributed to reserve managers who stake KNC."

Coin Distribution

  • An analysis into its distribution can be read here, done by Glassnode (23-3-2020):

"A whopping 72.03% of KNC are owned by the top 0.24% of addresses. 13.24% of the supply is controlled by market participants with an investment below $4,100 USD.

To sum up, this EOA distribution analysis shows that:

  1. The top 0.01% of addresses hold 28.53% of KNC.
  2. The top 0.1% of addresses hold 61.18% of KNC.
  3. The top 1% of addresses hold 84.34% of KNC.
  4. The top 5% of addresses hold 93.67% of KNC."

Tech

How does it work?

"Kyber is a fully on-chain liquidity protocol that can be implemented on any smart contract. There are several network actors that are involved in Kyber transactions:

  1. Reservesㅡliquidity sources in the network that provide liquidity in terms of token inventory and prices on their smart contracts.
  2. Takersㅡentities that take the liquidity provided by the registered reserves to trade from one token to another token.
  3. Kyber Core Smart Contractsㅡallow actors to join and interact with the network. As an example, Kyber provides functions for the listing and delisting of reserves and trading pairs.
  4. Maintainersㅡanyone who has permission to access the functions for the adding/removing of reserves and token pairs, such as a DAO or the team behind the protocol implementation.

The protocol has a few key features, which make Kyber a convenient choice for application developers."

Fees

Upgrades

  • Had its Katalyst & Kyber DAO upgrade on the 7th of July.
  • From this article (23-10-2020):

"Kyber Network has just released the KyberPRO framework intended for on-chain market making. According to the team behind the launch, current automated market makers are not optimal and offer no control over the pricing."

Staking 

"Kyber just announced Katalyst, their new token model which places a heavy emphasis on KNC staking for their DEX model. Users who stake KNC earn a portion of exchange fees along with having governance rights."

  • From their blog (2-4-2020):

"Staking and voting are done in epochs, which just means fixed periods of voting time, denominated in Ethereum block times. One KyberDAO epoch period will last about 2 weeks before the next one begins.

The benefits of this short epoch period are faster reward distribution and DAO conclusion (hence faster decision-making). The cons are that there needs to be at least one voting campaign every 2 weeks, resulting in more work for the Kyber team, as well as more frequent participation required from KNC stakers.

After every epoch, there will be ETH set aside for voting rewards. The total amount of rewards is decided by a few main factors: trade volume, network fees decided in the previous epoch, and proportion of fees allocated for voting rewards. The network fee percentage and fee allocation ratio are decided by the KyberDAO.

As an individual KNC staker, your share of the rewards received after the epoch will be determined by your voting points (the amount of KNC you have staked during the epoch x the number of campaigns you voted on), in proportion to the total voting points of all KNC stakers."

No Minimums, Lockups, or Slashing

  1. No Minimum KNC: To maximize participation, there will be no minimum on the KNC required for staking.
  2. No Lockups: Users will always be able to withdraw the full original amount of KNC staked on the KyberDAO smart contracts at any time, even if they do not vote or claim rewards. There is also no custodian and no time limit for them to claim rewards on the KyberDAO. However, withdrawing your staked KNC might affect your voting power and rewards claimable for the current and subsequent epochs.
  3. No ‘slashing’: Unlike other staking mechanisms, where you need to run a node and your staked tokens could potentially be confiscated by the network during black swan ‘slashing’ events/an inability to fulfill validator duties, on the KyberDAO you can always withdraw the same amount of KNC you originally staked."

"At time of writing, the number of KNC staked has amounted to over 57 million (over 31% of the circulating supply) with a commitment of more than 3.4k unique addresses."

Scaling

"A New DEX Trading Experience based on ZK-Rollups. ZKyber aims to build a ZK-Rollup-based L2 scaling solution that makes trading on Ethereum faster, cheaper, and fairer, without sacrificing security.

Different Implementations

Interoperability

  • From their blog (2-4-2020):

"Although Kyber is built primarily for Ethereum, its smart contract can be incorporated into other networks. The protocol has been deployed on several other platforms, such as EOS and TomoChain. Also, Kyber is working on the Waterloo project, which will connect Ethereum with EOS and help facilitate token swaps between the two ecosystems without third-party intermediaries."

  • (Not anymore as of early 2021).

Other Details 

  • Provides rich payment APIs and a new contract wallets that allow anyone to seamlessly receive payments from any token. Users can also mitigate the risks of price fluctuations in the cryptocurrency world with derivative trading.
  • "Kyber Network can power anything from wallets to exchanges to NFT’s and de-fi apps."

Different reserve types

  • From their blog (9-6-2020):

"In previous blog posts, we gave an overview of Kyber’s different reserve types, including how the Kyber Automated Price Reserve (APR) is useful for token teams and individuals, and how the Bridge Reserve pulls liquidity from other on-chain sources like Uniswap, Oasis, DutchX, and Bancor.

Today, we want to share about Fed Price Reserves (FPRs), which is uniquely designed to allow professional market makers (MMs) or advanced developers to effectively market-make and generate profits on-chain. Market makers running FPRs provide liquidity for about 70% — 80% of all trades happening on Kyber."

Oracle Method

"KyberSwap describes front running as Sniping attack and describes its mitigation techniques through slippage limitation parameters here. Flashloan attack mitigation techniques are not documented."

  • KyberSwap has integrated Chainlink Price Feeds on Arbitrum, Avalanche, BNB Chain, Ethereum, Optimism, and Polygon (18-8-2022).
  • Integrated ChainLink (12-6-2020)
  • KyberSwap integrated Band Protocol (19-10-2020).
  • These were used in Kyber to protect users with a reference price. Their DMM does not need it (4-2021).

Compliance

Their Projects

Krystal

"Krystal, a new app built by KyberSwap, aims to save users time, money, effort, and more by consolidating some of the best DeFi services."

KyberSwap (Classic)

  • Kyber DMM rebranded to KyberSwap (7-12-2021).
  • From their blog (21-1-2021):

"Kyber will be launching DeFi’s first automated Dynamic Market Maker (DMM), which is also the first new liquidity protocol added to the network and is accessible to anyone, including retail LPs and token teams. The new Kyber DMM addresses two of the most critical problems in AMMs today — capital inefficiency and impermanent loss.

Unlike the static nature of typical AMMs and other liquidity platforms in the space, the Kyber DMM protocol is designed to react to token pairs and market conditions to optimise fees for liquidity providers and rates for takers. This is achieved via two simple yet novel mechanisms: Programmable Pricing Curve based on the nature of the token pairs and Dynamic Fees based on market conditions.

Higher adoption of Kyber DMM would potentially increase the fees collected by the KyberDAO (and rewards for KNC voters) in the long run."

KyberSwap Elastic

"Liquidity Providers (LPs) now have the flexibility to supply liquidity to an Elastic pool using a custom price range of their choice to determine how ‘concentrated’ the liquidity is. LPs can concentrate liquidity by using a narrow price range for the token pair. This way, liquidity in the pool is used more efficiently, mimicking much higher levels of liquidity and achieving better slippage, volume, and earnings for LPs. This is especially effective for stablecoins and correlated pairs (e.g. USDC-DAI) which have little movement in price."

Serum

"FTX is building a DEX, Serum, on the Solana blockchain with the help of partners like Kyber Network and Multicoin Capital. Serum is cross-chain comptaible, giving it access to liquidity on DeFi dApps on Ethereum. The DEX will run on a central limit orderbook, but will still operate in a trustless manner."

SimpleDeFi

  • From their blog (8-5-2020):

"Our next integration is Simple DEFI, a DApp that bills itself as the most secure DeFi lending service on Ethereum. The DApp uses Compound, Kyber and Zerion to provide high interest lending rates that can be withdrawn at any time."

Relay Bridge ETH-EOS

  • (Not anymore as of early 2021).
  • From their blog (30-7-2019):

"In the previous post we focused on one side of the equation — relaying payment data from EOS to Ethereum. This time we share our work for moving assets the other way around, from Ethereum to EOS. We demonstrate it by having the Kyber Experimental DAO move a KNC token to the EOS blockchain.

The bridge development itself took on some prominent challenges:

  1. Implementing POW verification logic (Ethash) on an EOS contract.
  2. Maintaining the longest chain of relayed blocks.
  3. Verifying data authenticity through traversing modified Merkle Patricia tries."

ZKyber

"A New DEX Trading Experience based on ZK-Rollups. ZKyber aims to build a ZK-Rollup-based L2 scaling solution that makes trading on Ethereum faster, cheaper, and fairer, without sacrificing security.

Roadmap

  • Can be found here. (17-12-2019).
  • Update from their blog (7-10-2020):
  1. "Enhancing liquidity by optimising network fees and building up our dedicated reserve ecosystem
  2. Shifting control to the KyberDAO when it comes to adding tokens and reserves to the network
  3. Creating a new open system for permissionless liquidity contribution that is usable by anyone in DeFi

We are submitting the following Kyber Improvement Proposals (KIPs):

  1. KIP-3: A reduction of our Kyber Network Fee parameter from 20bps to 10bps (0.2% to 0.1%). While this might mean a short-term reduction in rewards, we believe this is an important factor in retaining competitiveness and in turn leading to long-term network growth and long-term returns to stakeholders.
  2. KIP-4: To add fees to our bridge reserves, which currently are not charged any fees. This will create an equal playing field between the bridge reserves and market makers running our Fed Price Reserves (FPR) and APRs.
  3. KIP-5 and more: In the coming months, we will also be gradually allowing the KyberDAO to approve new tokens and reserves. The KyberDAO will soon be able to take an extremely active role in deciding which tokens and reserves can leverage our network, and expedite the addition of popular utility tokens."
  • From their blog (21-1-2021):

"Firstly, we are embarking on the Kyber 3.0 upgrade, which will transition Kyber from a single protocol into a hub of purpose-driven liquidity protocols that are catered to different DeFi use cases. This will be the biggest change to Kyber’s architecture and token model since its inception and will be implemented over 2 phases — Katana and Kaizen.

Secondly, as the first major addition to our new network, we will launch a brand new liquidity protocol called the Kyber DMM — DeFi’s first automated Dynamic Market Maker. Kyber DMM will provide important benefits to liquidity providers, allowing fully permissionless liquidity contribution from anyone and access to this liquidity by any taker (e.g. Dapp, aggregators, end users).

Thirdly, to support the new architecture and increase the overall value of the network, a proposal to upgrade the KyberDAO and KNC to a new token contract will be made and voted on, with the aim to greatly enhance KNC token’s governance power, create multiple streams of utility, as well as support new liquidity innovation."

Usage

  • The project recently (8-2019) implemented the ability for limit orders, spurring it’s monthly volume to the highest it’s ever been $59.4M
  • From the Token Economy:

"Kyber has been doing over $10 million in weekly volume about half of the weeks in the last few months, which is above Uniswap. In other words, Kyber is on track to bypass Uniswap soon."

"November was the month we hit and surpassed $400 million total volume on Kyber, carried out the 500,000th trade on the network, and hit a daily all time high volume of $7.33 million.

6,387 unique addresses in November (up 12% over October) have swapped with Kyber. Note: integrations like Nuo and Fulcrum count as single addresses and therefore their users are not included in this unique address figure.

3,166 addresses trading multiple times throughout November (up 21%)
$1,140 (or 7.0. ETH) average size per trade (up 36%)"

"DeFi dapps pulling in liquidity from Kyber have increased their volumes by 87% over the last two quarters. Dapps like Fulcrum and DeFi Saver have shown especially strong growth with 499% and 284% increases respectively over the last six months. 1inch.exchange is another strong performer with continuous month-on-month growth while Nuo has seen a dip since its peak in July.

The number of new users (measured by the number of new addresses interacting with Kyber within that month) has been on a continuing growth trend since Kyber’s mainnet launch back in 2018. Within this time period a total of 52,393 addresses have carried out 633,946 trades worth 2,853,033 ETH (equivalent to $535M). Note: new address numbers above exclude users and addresses interacting directly through DeFi dapps like Fulcrum and Nuo.

KyberSwap users come from a very diverse range of countries across the globe with users from more than 100 countries trading on KyberSwap in the last 90 days. 37% of users come from Europe, 35% from North America, 17% from Asia, 5% from Oceania, 3% from Africa, and 3% from South America. The US makes up the single largest country and accounts for just under a third of KyberSwap’s volume."

"Kyber had its best month on record in February as it reached new monthly and daily volume records and achieved its all time highest number of users and number of new users in a month since launch. USD volume for February was $139,590,000 while on the 13th of the month it reached an ATH of $11M traded on a single day (subsequently broken again 10th of March with $14M traded in a day). Kyber has also averaged $6.9M daily volume over the last 7 days (vs $5.4M Uniswap, $4.3M 0x, $3.4M Oasis)."

"In March alone, Kyber reached nearly $200M in monthly USD volume across roughly ~13K unique addresses. As such, the protocol’s volumes have translated into substantial earnings for KNC token holders—roughly $2.89M in annualized earnings based on April’s volumes."

"The march of the stablecoins continues and they now make up a whopping 63.7% of all token volumes on Kyber. We see this increase in volume in non-speculative assets as a clear sign of Ethereum’s increasing adoption as a platform for decentralized finance and part of a narrative of maturing lending, borrowing, and margin trading products. A year ago stablecoin dominance on Kyber stood at roughly 40% with SAI making up most of that volume.

Kyber Network continues to attract a diverse range of dapps for their liquidity needs and in April, 71 different dapps and services pulled liquidity from Kyber. After KyberSwap’s web/iOS/Android offerings, DeFi dapps like 1inch.exchange and DeFi Saver and popular wallets including MyEtherWallet and Trust Wallet made up the largest consumers of Kyber’s liquidity last month."

  • From their blog (4-8-2020):

"Kyber is the most used and integrated decentralized finance (DeFi) protocol in the world, with over US$1 Billion worth of transactions facilitated since its inception. Kyber supports over 80 different tokens, and powers over 100 integrated projects including popular wallets Trust, Enjin, Argent, and the HTC Exodus smartphone, as well as DeFi platforms Nuo, DeFi Saver, InstaDApp, Set Protocol, Melon, and many others."

Projects that use or built on it

"Kyber was the most widely used DeFi application in 2019. Currently, Kyber has over 100 integrations with different DeFi projects."

Pros and Cons

Pros

Cons

  • Kyber tech is not suited for high gas fees (13-10-2020). Their new DMM is said to have similar gas costs as Uniswap (4-2021).

Competition

Team, Funding, Partners

Funding

"A big thank you to Signum Capital and Hashed for their strong support of Kyber Network since day one. We look forward to their participation in the KyberDAO as valuable Kyber stakeholders."

"Kyber is supported by well-known names such as Pantera Capital, Fenbushi Capital, FBG, Danhua Capital, Hashed, Hyperchain Capital, and many more are Kyber investors."

Partners

"The KeeperDAO treasury has completed a token swap exchanging 534 ROOK and 500k USDC for 500,00 KNC. @loi_luu joins as an advisor."

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