Review on Kyber Network by Fanuel PORPORTY
Kyber Network is an interesting protocol which can bring fluidity, security and liquidity to carry out exchanges of crypto-assets.
Kyber Network is a decentralized exchange protocol.
It is used as a means to transfer tokens of different cryptocurrencies from one person to another, without having to go through an exchange site as we know them. Kyber will offer users a fixed rate for exchanging a token and free them to accept it or not.
To function properly, the Kyber Network is divided into several actors who each take care of a specific task. These interact with the Kyber smart contract:
1. The users. They are the ones who will send and receive tokens via the network. They can be normal natural persons, traders who accept a maximum of different cryptos but who only want to receive one for convenience or even smart contracts which execute an action.
2. The "reserve entities". They are the ones who bring the cash to the platform.
3. The "reserve contributor". They are the ones who provide the funds to the reserve entities.
4. The "reserve managers". They are the ones who manage the level of funds available in the reserves, who calculate the exchange rates and who decide on the commissions charged by the network.
5. The operator of the Kyber Network. It is he who decides to add or remove certain reserves and who decides which tokens he intends to authorize on the platform. At first, the team behind the project will play this role, but thereafter, a decentralized governance system will play this role.
the KNC is an ERC20 token that a reserve manager must purchase if it wishes to manage a reserve on the network. Whenever a token exchange occurs, the network charges fees in KNC to the reserve.
These costs are used to:
* Cover network operating costs.
* To reward third parties who bring volume of
trade on the network.
* What is left is burned via a token burn.
Pros
- Ability to send the crypto-asset of your choice to a person who will receive the one of their choice without first having to convert their tokens on an exchange site.
- Competition between the different reserves in order to offer the most advantageous exchange rate possible to users.
- The number of KNCs will decrease over time via a token burn after each transaction, which means that the token should gain in value the more the project becomes popular.
- The user who wants to send crypto assets does not need to hold KNC tokens.
Cons
- They have serious competitors.
- Network governance will first be centralized and managed by the development team.
- It will not be possible to send all cryptocurrencies. Only those authorized by the network can be used, which could be an obstacle to the development of the project.
