Kyber Network (KNC), founded in 2017 as a decentralized liquidity protocol designed to grant decentralized applications, DeFi, and other blockchain systems instant, secure token swaps. It seeks to facilitate efficient and seamless token exchange with minimal slippage by aggregating liquidity from a pool of sources.
The project was created to solve the fragmentation of liquidity in decentralized ecosystems by providing a unified protocol for token swaps. The KNC token is at the center of Kyber’s world: a utility and governance token. Holders of KNC vote on proposals and are rewarded for providing liquidity into the pools.
Loi Luu, Victor Tran, and Yaron Velner were the visionaries behind the development of Kyber Network. Luu is a blockchain researcher and entrepreneur. He envisioned a platform for consolidating liquidity and making it easy to exchange tokens within the growing DeFi ecosystem. Tran, as the CTO and co-founder, applied his experience in software development to make sure the protocol could scale and be secure. Velner, the blockchain expert, contributed to creating the technical framework of Kyber and its integration with smart contracts. They came up with a mission to build frictionless and seamless, decentralized liquidity infrastructure to power a variety of blockchain use cases.
Kyber Network aggregates liquidity from multiple sources and provides a decentralized infrastructure for efficient token swaps. KyberSwap is a decentralized exchange aggregator built on Kyber’s protocol, offering users the best rates by sourcing liquidity from a wide range of DEXs and liquidity pools.
Kyber’s Dynamic Market Maker (DMM) introduces amplified liquidity pools with dynamic fees, maximizing returns for liquidity providers while reducing slippage for traders. Developers can integrate Kyber’s protocol into their dApps, enabling users to swap tokens in a decentralized manner and become liquidity providers. Kyber Network supports Ethereum, Polygon, Avalanche, BNB Chain, and many other blockchains, increasing interoperability and accessibility.
Kyber guarantees complete decentralization and transparency since all token swaps are executed on-chain. The protocol automatically optimizes fees based on market conditions to maximize efficiency for traders and liquidity providers.
Kyber’s scalability is based on the underlying blockchain network, and with integrations into Layer-2 solutions like Polygon, Kyber achieves significantly higher transactions per second (TPS). It achieves a TPS of 15–30 transactions per second (TPS) via EThereum. With Arbitrum it achieves up to 40,000 transactions per second (TPS), while Polygon supports up to 65,000 transactions per second (TPS).
Integrations with top DEXs like Uniswap and Balancer allow Kyber to source liquidity from various pools, providing users with the best available rates. The integration of Kyber with Polygon helps drive further scalability and reduces transaction costs, making it accessible to a broader audience. A partnership with Chainlink secures and assures accurate price feeds for Kyber’s token swaps and liquidity pools. Kyber’s protocol underpins token swaps for lending protocols like Aave and Compound, making the management of liquidity seamless for DeFi applications.
Recent developments include KyberSwap introducing advanced features like limit orders and gasless transactions, which improve the user experience while trading. Kyber has unveiled a cross-chain liquidity hub that enables seamless token swaps across Ethereum, Avalanche, BNB Chain, and many others. The introduction of reward programs by Kyber Network has spurred liquidity providers to increase activities on the platform, resulting in higher trading volumes. Kyber continues its integration into major DeFi platforms that power yield farming, lending, and trading protocols with much-needed liquidity.
The active participation in governance decisions has been realized by KNC token holders who have taken part in protocol upgrades, fee adjustments, and incentive programs. In its continuous integration of Layer-2 solutions, Kyber has been reducing gas fees and increasing transaction speeds, making the platform increasingly competitive for high-frequency trading and DeFi applications.
On December 24, 2024, the native token of Kyber Network, KNC, changes hands at about $0.54 with a market capitalization of $104 million, making it one of the leading DeFi protocols.
KNC reached its all-time high (ATH) of $5.71 on April 28, 2022, and its all-time low (ATL) of $0.36 on August 5, 2024. Factors affecting price movements include DeFi adoption, where increased usage on DeFi platforms drives greater demand for the KNC token. Liquidity mining rewards attract active and potential liquidity providers, leading to rising demand or creation of buy orders. Cross-chain support expands access to tokens from other blockchains, further influencing KNC’s price dynamics.
Kyber Network is a liquidity protocol of the highest order, which was designed to make token swaps as seamless and user-friendly as possible across chains. With its innovative Dynamic Market Maker, cross-chain capability, and growing partnerships, it continuously redefines decentralized trading and liquidity management. Consistent innovation and community-driven governance keep Kyber as a keystone in the evolving landscape of DeFi.
For more information, watch the video below:
Expand your understanding of crypto by exploring our detailed guides on OCEAN, LPT, and FET today.
FAQs
Q1. What Is a Kyber Network Used For?
- A: It powers dApps’ and DeFi platforms’ functions of token swapping and offering/accessing decentralized trading via its services.
Q2. What is the purpose of the KNC token?
- A: KNC tokens are used for staking, governance, and incentivizing liquidity providers within the Kyber ecosystem.
Q3. What is unique about Kyber?
- A: It uniquely combines on-chain liquidity aggregation with on-chain features like dynamic fees and cross-chain compatibility.
Q4. How does scalability work on Kyber?
- A: Kyber integrates with Layer-2 solutions, like Polygon and Optimism, that offer reductions of gas fees and further improve transaction throughput.