What does Kyber Network do?
Kyber Network is a project that runs on the Ethereum blockchain and uses Ethereum smart contracts to carry out exchanges between cryptocurrencies. It was launched in September 2017. Vitalik Buterin is a notable advisor of the project.
Kyber Network’s most important offering is its DEX. While many users are now favoring decentralized exchanges over centralized options, many decentralized exchanges suffer from poor liquidity, which makes it hard to buy and sell cryptos. Kyber Network uses its Dynamic Reserve Pool to provide high levels of liquidity, even on a decentralized exchange.
Furthermore, Kyber Network offers a number of features that may be attractive to businesses. The technology can be easily implemented into dApps, wallets, and digital payment systems, broadening the range of cryptocurrencies that enterprises can work with.
What are KNC tokens used for?
KNC tokens are primarily used in Kyber Network’s Dynamic Reserve Pool. Any user with a surplus of coins and tokens (of all cryptocurrencies) can help the network maintain liquidity by offering their tokens for sale in the Dynamic Reserve Pool. Individuals who choose to do this are called Reserve Managers. They set their own rates of exchange and profit from every transaction.
When Reserve Managers facilitate exchanges between cryptos (and profit from them), they give back to the network by paying fees with KNC tokens.
How can KNC value appreciate?
Kyber Network is ambitious and working hard at becoming mainstream. The project has been integrated into MyEtherWallet, the most famous wallet used to exchange Ethereum and ERC20 tokens. The team is also collaborating with other projects and non-crypto enterprises in order to bring top-notch services to its users.
These collaborations, coupled with its unique features, are likely to make the project more popular and used for more transactions, which will cause the appreciation of KNC tokens.
The tokens have a deflationary nature since KNC paid for exchange fees are burned after operating expenses are paid for. The fixed total supply of KNC tokens in conjunctions with this deflationary mechanism means KNC will be scarce in the future, making them more valuable.
What is the difference between Kyber Network and its competitors?
KNC competes with traditional exchanges like Binance, Kraken and Poloniex as well as other cryptocurrency projects. Unlike traditional exchanges, Kyber is decentralized and is not controlled by any single authority.
0x is Kyber Network’s closest competitor. The primary difference between the two cryptocurrencies is that Kyber performs the entire exchange process on-chain while 0x is a protocol for order books and matching processes to occur off of its main blockchain.
However, Kyber Network may face scalability issues as usage increases. Since Kyber Network runs on Ethereum, its future scaling is in the hands of Ethereum’s developers.
