Kyber Network: DeFi’s bandaid to Impermanent loss?
Kyber Network is a decentralized exchange built on Ethereum blockchain. A decentralized exchange is an on-chain liquidity protocol that lets the user trade tokens, in this case ERC20 tokens, on the platform.
The problem: Finding a good liquidity source for DeFi Applications (DApps) is difficult since the sources are all scattered. For that reason, finding the best deal for a trade or finding a source with a sufficient amount of liquidity is harder.
The solution: Kyber Network combines diverse sources into a single network, enabling multiple token trading in a single blockchain transaction. This also allows traders to find the best available rate.
The KNC Token
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Loi Luu, Victor Tran, and Yaron Velner, who have a strong foundation on smart contracts, launched KNC in 2017 raising $48 million and minting 226 million KNC. For every transaction, a fee of KNC will be paid for operational costs and incentive for third party entities. After which, since the token has a deflationary model, a portion is “burned” from the circulation.
How to Buy KNC in the Philippines
KNC is one of the cryptocurrencies launched on Coins.ph, the leading mobile wallet in the Philippines in 2021.
1) Sign up with a Coins.ph account. (If you already have account and is already ID and selfie-verified, proceed to step 3)
2) Get ID and Selfie-verified.
3) Create a ETH/ERC-20 wallet on the app. The option should be immediately viewable once the app is updated to the latest version. (If you cannot see this option, update your app to the latest version.)
4) To buy KNC, just “slide” to convert “Php” to “KNC.”
- Exchange – A platform where ERC20 tokens can be traded with each other.
- Aggregated liquidity pool/Reserve Pool – combines different liquidity sources into one liquidity pool.
- Staking – KNC tokens may be staked for rewards.
- Governance – holders of the token may vote on improvements on the platform and be rewarded.
Fiat Option – Unlike other decentralized exchanges which can only exchange cryptocurrencies, KyberSwap in partnership with Coindirect give users the ability to buy cryptocurrencies directly with fiat.
How safe Is Kyber Network
In decentralized exchanges, funds are never held by the exchange and only on the user’s wallet thus the user is certain that their funds are safe. It also had audits from SmartDec, ChainSecurity, BlockchainLabs.NZ and Hacken thus there is certainty in the network’s security based on the third-party assessments of the source code. Additionally, Kyber is insured up to $20 million by a decentralized insurance program and a program to give rewards for programmers who found bugs on the smart contract.
Kyber as a bandaid to Impermanent loss
The strategy would be: increasing the fee on high volatility period, capturing more fees. And increase volume by reducing the fee on low volatility. (What is Impermanent Loss: Impermanent loss is when you provide crypto to a liquidity pool and then the price of the crypto you deposited changes since the time you provided liquidity.)
KNC Token Distribution
Kyber Multisig Wallet currently holds an approximate of 14% of the KNC token, an approximate of 20% for exchanges and an approximate of 60% for other wallets.
Token Governance (Katalyst and KyberDAO)
KNC stakeholders may vote on the improvements that Kyber Network will decide and/or implement. In exchange for being active in the community, KNC holders will be rewarded by their performance. You may refer to this blog for more information:
With Kyber Network’s ranking as #7 in terms of TVL for Dexes and multiple exchange listings, deflationary model, various DApp integrations, the team having a strong foundation of knowledge on blockchain and Vitalik Buterin (founder of Ethereum) as their board advisor makes it certain that this will not be an abandoned project.
This article s published on BitPinas: How to Buy KNC at Coins.ph! | Kyber Network Crystal Philippines Guide