About

Kyber Network is a multi-chain crypto trading and liquidity platform that aggregates liquidity from various sources for optimized token trades. It enables instant swaps, yield earnings, and decentralized token exchange integration for applications, emphasizing best rates and capital efficiency in DeFi.

History

Kyber Network is an Ethereum based protocol focused on aggregating liquidity and facilitating swaps for ERC-20 tokens. The team raised money through an ICO in September, 2017 and launched the mainnet in February, 2018.

Kyber functions by aggregating liquidity from reserves which are operated by reserve managers. These managers are responsible for maintaining liquidity in the trading pairs offered and updating bid and ask spreads. For their services, managers are compensated through the spread in each transaction. Further, anyone with additional capital can contribute to reserve pools and receive a return.

There are currently three types of reserve managers: Fed Price Reserve utilizes off-chain price feeds and calculates conversation rates, Automated Price Reserve uses an algorithm to automatically determine prices based on relative liquidity, and Orderbook Reserve which is the only trustless method that uses a fully on-chain orderbook.

Services such as wallets, vendors, or decentralized applications can build on top of Kyber to access the pools of capital consisting of the aggregate of all reserves. Users of these services can swap tokens with their order being executed at the best price available. This incentivizes reserve managers to ensure they keep their prices competitive and to make markets in lower liquidity tokens where they can take larger spreads.