The DeFi ecosystem includes decentralized exchanges, insurance, stablecoins, aggregates, and money markets. Today, however, we will focus on decentralized exchanges, specifically the Kyber Network, a completely on-chain liquidity protocol.

What is Kyber Network?

KyberSwap is a decentralized cryptocurrency exchange (DEX) that launched on the Ethereum mainnet in 2018. KyberSwap allows users to trade Ethereum (ETH) and over 70 ERC20 tokens. Token swaps happen seamlessly for all tokens available on the exchange thanks to Kyber Network’s on-chain liquidity protocol. KyberSwap is best for intermediate, advanced, and altcoin-focused traders.

Advantages

KyberSwap has partnered with Coindirect to enable users to purchase ETH with fiat currency. While KyberSwap’s fees are quite high at 3.5%, it is currently the only decentralized exchange that allows fiat deposits.
KyberSwap uses Kyber Network’s on-chain liquidity protocol to access liquidity from a variety of reserves. On other DEXs, traders have to worry about market makers and buyers for the tokens listed (a very common problem).
WBTC (Wrapped BTC) – Kyber is a founding merchant, liquidity provider, and DAO member of WBTC. The ERC20 Bitcoin token represents the value of Bitcoin on the Ethereum blockchain. Among other centralized and decentralized exchanges, WBTC is listed on KyberSwap.
Wallet Integration: Kyber works with MyEtherWallet, imToken, Coinbase, and Enjin, among other popular crypto wallet providers. Kyber allows users to trade tokens without leaving their wallet app.
Kyber provides a solution for non-custodial limit orders, which are not available on most DEXs. Therefore, traders can place limit orders without locking funds on the exchange. The funds remain in the wallet until the transaction is made, and no deposit or withdrawal is required. Limit orders have prices as low as 0.1%, and KNC holders can trade without paying for gas.
The KyberSwap mobile application is available for both iOS and Android devices.Tokens can be swapped, order limits created, tokens transferred, price alerts set, and watchlists generated for favorite tokens.
Trading of over 70 ERC20 tokens is supported. Kyber’s native KNC token is not the only one available. There are also BAT, DAI, MKR, LINK, ZRX, and USDT.

Disadvantages

Ethereum-based assets: At the moment, Kyber does not support crypto assets that are not built on the Ethereum blockchain. This is common practice among decentralized exchanges.
Fees for market orders are dependent on gas fees. Prices for market orders are highly dependent on the amount of congestion on the Ethereum network. Gas fees increase when a large number of users send transactions at the same time. Gas fee inconsistencies will likely remain an issue for KyberSwap until Ethereum’s scalability issues are resolved.

Kyber Network Specifications

There are several key network components that allow Kyber to create a service for people to exchange cryptocurrencies.

Smart Contracts: These contracts provide the infrastructure that enables token swapping.
Reserves: These provide the liquidity required for network swaps to take place.
Takers: They execute trades and remove some of the network’s liquidity.

To provide liquidity, Kyber Network uses a reserve system. When a user places a trade, the network searches the reserves to choose the best possible rate that the picker is currently offering.

Takers can effectively convert tokens from the three major reserves.

Bridged Reserves: These are used to gain access to additional liquidity via other decentralized exchanges.
Automatic Price Reserve (APR): The rate for tokens is determined by smart contracts. APR transactions happen directly on the Kyber Network blockchain. Smart contracts are used to keep tokens safe and transfer them between users.
Price Feed Reserves (PFRs): These are decentralized market makers. These pricing fees calculate exchange rates between tokens and record data in smart contracts. Takers are then referred to the reserves via smart contracts so that they can calculate the exchange rate for the tokens.

Transaction fees for KyberSwap

KyberSwap is Kyber’s own user interface for token swaps. It is also available on mobile platforms. You can fully utilize KyberSwap to swap over 70 tokens from your wallet instantly and create limited orders.

The fee density for successful limit orders on KyberSwap is 0.1%. And the gas fee was included in the fee.

If you have more than 2,000 KNC in your wallet, you can trade without transaction fees on KyberSwap, limited to 10 orders per day.

If you just want to swap tokens at the rate provided, You will not have to pay any payment transaction fees. Kyber waives transaction fees when swapping tokens. You will only pay transaction settlement fees for your own trade settlement orders.

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