What is KNC?
KyberNetwork is a decentralized exchange built on-chain that provides several useful applications. By providing payment APIs for both merchants and users to instantly convert tokens both effortlessly and trustlessly. There’s no orderbook you send an order with a pegged conversion rate before sending the transaction and receive the corresponding amount. Users pay no fees other than gas for the transaction. KyberNetwork utilizes a decentralized exchange structure to mitigate the risk of centralization of exchanges.
Decentralized on-chain exchange.
Many centralized exchanges have their security risks and slow process times. In some cases taking days to withdraw funds. Decentralized exchanges have been known to have their flaws as well oftentimes they don’t have enough liquidity on-hand to support active trading, costs to change a trade can be high when the order book is on-chain. By removing the order book it gives the platform the ability to securely exchange assets instantaneously at minimal cost.
Kyber Networks design and functions.
There are users, reserve entities, reserve contributors, a reserve manager, and The Kyber Network operator. Users are individuals, merchants or smart contract accounts, and are able to send or receive tokens on the network. Reserve Entities bring liquidity to the platform and they can either be internal or registered by a third-party. Whether they are classified as public or private depends on public entities contribute to their reserves.
Reserve Contributors provide funds to the reserve entities and are only associated with public reserve entities, they share profits from the reserve. The Reserve Manager maintains the reserve calculating exchange rates and enters them into the network. Lastly the Kyber Network Operator adds or removes reserve entities and controls the tokens that are listed. Initially the Kyber team will control this role although they plan to transition to a more decentralized governance.
What else is Kyber Network?
Besides an exchange Kyber is also a medium of transfer between two people using tokens. This makes it useful for p2p transfer and ICOs. Because Kyber does the exchange during the transfer the tokens being sent don’t have to match another specific token.
Kyber Network Crystals – ERC-20 Token
In each trade a small fraction of the trade volume will be paid by the reserve to the Kyber Network platform in the form of KNC. This fee is how Kyber Network earns profits from trading activities. The collected KNC fees will be used for paying operational expenses, supporting partners who bring liquidity to the platform, and the rest will be burned. The conversion rate between KNC will be updated frequently based on the trading rates on multiple exchanges.
KNC Team / Advisors
KNC Partners / Investors
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Investing in cryptocurrencies and Initial Coin Offerings or ICO’s is a highly risky as well as speculative financial maneuver. This article is not a recommendation by Black Moon Research or the author to invest in cryptocurrencies or ICO’s. Since each individuals situation is unique, a qualified professional should always be consulted before making any financial decisions. Black Moon Research makes no representations or warranties as to the accuracy or timelines of the information contained herein.
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