In this article, you will learn what is KyberSwap. KyberSwap is a decentralized exchange (DEX) aggregator and liquidity protocol that achieves the best rates for crypto traders through liquidity aggregation, while providing capital-efficient and higher returns for liquidity providers.
What is KyberSwap?
Kyber Swap is a decentralized token swap platform utilizing the Kyber Network protocol. Think of Kyber Swap as an owner free instant trading system for ERC-20 tokens. For example, if you wanted to trade Chainlink (ERC-20) to Dai (ERC- 20 MakerDao stablecoin), this becomes possible securely without sending funds to an exchange.
As Kyber's flagship project, KyberSwap is strategically using its advanced features to fuel and empower various users in the DeFi ecosystem, including traders, LPs and developers. KyberSwap is the main protocol in Kyber Network's liquidity hub.
As a DEX aggregator, KyberSwap analyzes rates across thousands of exchanges to provide its traders with the best rates. Kyber ensures high-quality, accurate price feeds on KyberSwap through its partnership with Chainlink, a leading oracle network.
What are the Two Main Protocols of KyberSwap?
KyberSwap also concentrates liquidity from the industry's leading liquidity protocols, which allows LPs to earn from their crypto assets. Its two main protocols are KyberSwap Classic Protocol and KyberSwap Elastic Protocol.
- KyberSwap Classic Protocol implements AMM with programmable pricing curves customized for each trading pair. It uses a dynamic fee model that self-adjusts to ensure maximum returns for LPs.
- KyberSwap Elastic Protocol concentrates liquidity by allowing LPs to customize a price range to offer liquidity. It goes beyond Uniswap v3. automatically reinvesting LP fees to compound interest.
What Is Kyber Network Crystal (KNC)?
KNC is the utility-enabled governance token for Kyber Network. It not only interconnects all the stakeholders in the Kyber ecosystem, but it can also be used to transfer value beyond. KNC is a dynamic token you can upgrade, mint or burn, giving it The flexibility to better support the liquidity and growth of the network.
As a governance token, KNC is staked by holders who can also vote on KyberDAO's governance platform to receive trading fees. KNC is also used to incentivize and provide more value to LPs, above the trading fees they receive. Additionally, KNC can be used as collateral for loans and margin trading on DeFi platforms such as Aave.
Other use cases for KNC include facilitating crypto payments on platforms such as Monolith wallet and Pundi X.
Bottom Line
Liquidity is instrumental to the growth of DeFi, and Kyber Network is innovatively leading the way toward becoming a trust-minimized liquidity hub. Its unique Kyber reserve models and protocol design places it as a strategic liquidity infrastructure provider for a decentralized economy. This what is Kyber Swap.
