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Summary
KyberSwap.com (Kyber Network’s flagship product) is a multi-chain DEX aggregator + liquidity platform, which aims to offer the best rates for traders and the best returns for liquidity providers with concentrated liquidity.
Kyber launched on Ethereum in February 2018 and is a pioneer in the DeFi space, developing one of the earliest decentralized exchange protocols (DEX) with Vitalik Buterin as an advisor. The team has continued to innovate; spearheading the launch of WBTC (Wrapped Bitcoin) - the most popular ERC20 version of Bitcoin today (and a collateral asset on dForce), as well as developing amplified liquidity pools on KyberSwap that offers capital efficiency for any token pair. Kyber was the most used DeFi protocol in 2019 according to Binance Research and also part of the pioneer batch of Alliance DAO/DeFi Alliance mentors and Asia DeFi Network. Today, KyberSwap is one of the most popular DEX aggregators and liquidity platforms on Ethereum, Arbitrum, Optimism, BNB Chain, Polygon, and other chains.
This proposal aims to list the Kyber Network Crystal (KNC) token as a supply and borrow collateral asset on dForce on Ethereum, Arbitrum, Optimism, Polygon, and BNB chain, and work together on other initiatives with dForce.
We will also consider providing KNC incentives for the dForce community if KNC is supported as an asset.
Motivations
KyberSwap is one of the oldest and most popular DEX aggregators with an average of 400K web visitors per month KyberSwap has already been deployed on 14 chains, including Ethereum, Arbitrum, Optimism, BNB Chain, and Polygon. Total trading volume has crossed $15B+ and current total value locked (TVL) on all chains is $120M+.
KNC is Kyber’s utility and governance token, and is an important part of KyberSwap operations. KNC holders can stake KNC to vote on proposals to improve KyberSwap. In return, KNC voters receive rewards from fees collected through trading on KyberSwap and other benefits from ecosystem collaborations. As more trades are executed and new protocols added, more rewards are generated.
KNC is a liquid asset with many token holders. KNC holders may want to obtain additional liquidity without selling KNC so that they can still capture potential upside in value. With KNC supported on dForce, KNC holders can borrow funds for a wide variety of DeFi use cases, such as margin trading or for new investment opportunities, all without selling their current holdings.
We are keen on a long-term, strategic relationship with dForce,and adding KNC as a supply and borrow collateral asset is a good first step towards this objective.
We are also willing to discuss providing KNC incentives for the dForce community to get KNC supported!
Specifications
1. What is the link between the author of the proposal and the Asset?
Shane is Head of Strategy for DAO & KNC at Kyber Network, managing Kyber’s strategic efforts regarding the KyberDAO and KNC tokenomics for KNC holders.
Email: [email protected]
Telegram: shaneHk
Twitter: shaneMkt
2. Provide a brief high-level overview of the project and the token
About KyberSwap
KyberSwap is Kyber Network’s flagship product. It is a multi-chain DEX aggregator + liquidity platform which aims to offer the best rates for traders and the best returns for liquidity providers with concentrated liquidity.
KyberSwap provides substantial benefits to users/developers
- For Traders: KyberSwap aggregates liquidity from different DEX pools (including KyberSwap’s own pools), getting the optimal trade route and best price for dForce (DF) and other tokens. Traders can identify tokens that are ‘Trending’ or ‘Trending Soon’ using a detection algorithm that tracks on-chain metrics as volume and market cap.
- For Liquidity Providers: LPs deposit tokens into liquidity pools and earn compounding fees. Pools are flexible and have features such as anti-sniping and concentrated liquidity, mimicking higher levels of liquidity and achieving better capital efficiency, volume, and returns. KyberSwap offers much better slippage for the equivalent pool and trade size on a typical Univ2 AMM fork. Liquidity on KyberSwap would result in a much bigger positive impact on swap rates compared to typical DEXes. dForce (DF) token LPs can consider setting up a pool on KyberSwap to enjoy these advantages.
- For developers: Wallets and Dapps like dForce on Ethereum and other supported chains can integrate with KyberSwap pools/farms and aggregation API to provide the best rates for their own users, saving time and resources. Chainlink is already supporting price feeds for the KNC token on Ethereum, Arbitrum, Optimism, BNB Chain, and Polygon, and other chains so KNC can also be used as collateral on lending platforms such as dForce.
General KyberSwap stats
- 50+ DeFi/GameFi Dapp integrations
- Over $15.2 Billion+ worth of lifetime trading volume
- 400K web visits (Average last 3 months - similarweb)
- 616K cumulative lifetime unique users on Ethereum (New + Legacy KyberSwap)
- 7,000 average DAU
- 15,000 average daily transactions
- Current total TVL on all KyberSwap pools: $122M+
- Total TVL from aggregated DEXes: $24B+
About KNC
KNC is Kyber’s utility and governance token, and is an important part of KyberSwap operations. KNC holders can stake KNC to vote on KyberDAO proposals. Important proposals include improvements to KyberSwap, determining the various incentive mechanisms for liquidity providers, and capturing value created by new innovations. In return, KNC voters receive rewards from fees collected through trading on KyberSwap and other benefits from ecosystem collaborations. As more trades are executed and new protocols added, more rewards are generated.
KNC investors include: Hashed, Signum, ParaFi, HyperChain, and Stake Capital.
Side note: In 2021, KNC was upgraded to add additional utility and upgradeability. The old KNC was renamed KNCL (Kyber Network Crystal Legacy) to differentiate it from the new KNC. Since 20 April, 2021, users can migrate their KNCL (ie. convert it) to new KNC through a simple procedure.
Top exchanges are already supporting the latest version of KNC. KNC can be obtained on decentralized platforms such as KyberSwap as well as centralized exchanges such as Coinbase, Binance, FTX, Crypto .com, OKX, KuCoin, Kraken, Huobi, Gateio, Bitfinex, Bittrex, Bithumb, Upbit, WazirX, and eToro.
- KNC on Etherscan: 0xdeFA4e8a7bcBA345F687a2f1456F5Edd9CE97202
- KNC on Arbitrum: 0xe4dddfe67e7164b0fe14e218d80dc4c08edc01cb
- KNC on Optimism: 0xa00e3a3511aac35ca78530c85007afcd31753819
- KNC on Polygon: 0x1c954e8fe737f99f68fa1ccda3e51ebdb291948c
- KNC on BNB Chain: 0xfe56d5892bdffc7bf58f2e84be1b2c32d21c308b
If required by dForce, we can also add more liquidity for KNC on the selected chains after discussing with dForce team on the details.
3. Explain the positioning of the token in the dForce ecosystem. Why would it be a good borrow or collateral asset?
KyberSwap is a well-known DeFi project and KNC is one of the top tokens selected to be part of the DeFi Pulse Index. According to DeFi Pulse, for the top DeFi tokens that were selected, the “associated dApp and founding team must be widely considered legitimate.”
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KNC governs KyberSwap, one of the most popular DEX aggregators and liquidity protocols in DeFi which is deployed on 14 chains
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KNC is a highly liquid token but is still not on many decentralized lending platforms
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KNC price feeds are supported by Chainlink on Ethereum, Arbitrum, Optimism, Polygon, BNB Chain, and Avalanche
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KNC is already a supported asset on bridges such as Multichain for Arbitrum, Optimism, BNB Chain, Polygon, and Avalanche
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KNC has over 14,000 token holders, including crypto VCs and other DeFi projects
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If KNC is added to dForce, KNC holders would be able to lend KNC to earn interest instead of selling their tokens
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By supporting deposits of KNC as collateral, users can borrow stablecoins or altcoins for other activities
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KNC holders can borrow KNC for staking and earning rewards, and support governance proposals
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Kyber team and KyberDAO treasury are considering depositing KNC to borrow stablecoins
Benefits to the dForce Community
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KNC is highly liquid but it is not on any major decentralized lending platform on Ethereum, Arbitrum, Optimism, BNB Chain, Polygon, or other EVM chains. dForce can be one of the first to support it on these chains and beyond.
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KyberSwap has a large community on our social media channels (e.g. 242K Twitter followers). KyberSwap can provide marketing support and resources to promote the launch of KNC on dForce, thereby spreading more awareness about dForce. We can run a marketing campaign with dForce team and provide KNC incentives.
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KyberSwap is a high-performing DEX on various chains in terms of volume. Source: Defillama
- Top 3 DEX on Optimism
- Top 4 DEX on Arbitrum
- Top 8 DEX on Ethereum
- Top 10 DEX on Polygon
- Top 19 DEX on BNB Chain
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KNC has over 14,000 token holders, including VCs and other DeFi projects, and they would be able to have a direct use case for their tokens on dForce
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Kyber is expanding to a wide variety of chains (already on 14 chains), which is aligned with and can support dForce’s expansion efforts to other chains
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Kyber and dForce teams are in discussions on telegram for potential collaborations and listing KNC would be another positive step forward in our relationship
4. Provide a brief history of the project and the different components: DAO (is it live?), products (are they live?).
Kyber was founded by Victor Tran, Loi Luu, and Yaron Velner in 2017, with the first protocol live in February 2018. All 3 founders are well-known researchers in the Ethereum and DeFi community, and Victor and Loi were both Forbes 30 under 30 recipients. Yaron is also the founder of B.Protocol and Risk DAO.
- Victor Tran: CEO | Forbes 30 under 30 | Twitter: vutran54
- Loi Luu: Heading Kyber Ventures | Forbes 30 under 30 | Twitter: loi_luu
- Yaron Velner: Founder of B.Protocol and RiskDAO, current KyberSwap advisor | Twitter: yaron_velner
- Vitalik Buterin: Advisor, Kyber’s launch
Since inception, KyberSwap has successfully facilitated over $15 billion in transactions and over a million trades for thousands of users, with 50+ DeFi/Dapp integrations. For example, our main product KyberSwap integrated with leading trading analytics platforms DEXTools and DeFiLlama, enabling millions of users to access KyberSwap’s token pairs at the best rates.
KyberSwap currently supports 14 chains including Ethereum, BNB Chain, Polygon, Avalanche, Fantom, Cronos, Arbitrum, Optimism, Velas, Aurora, Oasis and BitTorrent, EthPoW and Solana.
Historical milestones
- Developed one of the earliest DEXes in 2018 with Vitalik Buterin as an advisor
- Built Oyente, which was the first automated smart contract verification framework and one of the most used open-source auditing tools by security experts (e.g. Enzyme, Quantstamp).
- Kyber initiated and co-launched Wrapped Bitcoin (WBTC), the most used wrapped version of BTC in the DeFi space today and a collateral asset on dForce.
- Created the Waterloo Cross-chain Bridge in 2019, a decentralized practical bridge between EOS and Ethereum, which inspired NEAR protocol’s Rainbow Bridge.
- Kyber was the most used DeFi protocol in 2019, according to Binance Research.
- One of the first to use DEX/liquidity pool aggregation on Ethereum by integrating different DEXes, and first to develop amplified pools with high capital efficiency for any token pair, not just stablecoins.
- KyberSwap launched as a unique DEX aggregator that not only has our own permissionless liquidity pools, but also sources liquidity from external sources to give the best rates to traders.
- First to develop and launch amplified pools with high capital efficiency for any token pair (before Uniswap v3), not just stablecoins.
- KyberSwap partnered with Lido Finance to bring low slippage, optimized liquidity for liquid staking pairs such as wstETH (as well as USDC, ETH, LDO liquidity) to Arbitrum and Ethereum.
- KyberSwap partnered with Multichain to provide an alternative UI with seamless bridging of cross-chain assets to Arbitrum.
- Kyber organized and participated in various hackathons that contributed to the launch of top DeFi projects. Examples:
- Kyber DeFi Hackathon 2019 with our partners Enzyme Finance (previously called Melon), Synthetix, Chainlink, bZx, Compound, and WBTC, contributed to the launch of Zapper (previously called DeFiZap)
- Kyber’s bounties in Ethereum hackathons such as ETHSingapore and ETHBerlin helped launch 1inch
- InstaDapp won a Kyber bounty with their integration in ETHIndia 2018, contributing to their successful launch
- KyberSwap is a Top 3 DEX on Optimism and Top 4 DEX on Arbitrum in terms of volume with high capital efficiency (High Volume/TVL).
Key KyberSwap Features
1. DEX Aggregation Algorithm
KyberSwap’s aggregation algorithm aggregates liquidity, automatically searching multiple DEXes on a chain to identify and select the optimal trade routes and best prices for users. KyberSwap makes trading more efficient and saves time and money for thousands of users. KyberSwap sources liquidity from over 70 different DEXs such as Uniswap, Sushi, Curve, and many others to achieve the best rates for traders on supported chains.
2. Concentrated/Amplified Liquidity Pools
Elastic Pools: Liquidity providers (LPs) can deposit tokens into Elastic pools and earn compounding fees. Pools have customizable price ranges and features such as anti-sniping and concentrated liquidity , mimicking higher levels of liquidity and achieving much better capital efficiency, volume, and returns. For example, with the same pool and trade size, stable token pairs with low variability in the price range (e.g. USDC/USDT) can be up to 1000x better compared to other Uniswap V2.
Classic Pools: LPs also have the flexibility to create or select amplified liquidity pools with an amplification factor that greatly improves capital efficiency and help reduce trade slippage.
As such, liquidity providers can achieve greater capital efficiency, rates, volume, and returns compared to other platforms. LPs earn more in an efficient manner. Moreover, LPs earn trading fees that are automatically claimed when you withdraw your liquidity.
3. Discover Trending Soon Analytics
KyberSwap users can discover view which tokens are ‘Trending’ and ‘Trending Soon’. Tokens displayed under the Trending tab are based on current trending data gleaned from top data aggregators CoinGecko and Coinmarket.
Tokens displayed under Trending Soon are detected based on Kyber’s special trend detection algorithm, using trading volume, price, market cap, and other on-chain data.
4. Limit Orders
KyberSwap users can set Limit Orders to ensure they automatically buy/sell assets at a desired price. A buy limit order will be executed only at the limit price or a lower price. A sell limit order will be executed only at the limit price or a higher one. This is another useful trading feature for DF holders who want to buy more DF at lower prices without staring at the screen 24/7.
5. How is the asset (KNC) currently used?
KNC is Kyber’s utility and governance token, and is an important part of KyberSwap operations. KNC holders can stake KNC to vote on KyberDAO proposals. Important proposals include improvements to KyberSwap, determining the various incentive mechanisms for liquidity providers, and capturing value created by new innovations.
In return, KNC voters receive rewards from fees collected through trading on KyberSwap and other benefits from ecosystem collaborations. As more trades are executed and new protocols added, more rewards are generated. Over $10M worth of rewards have been distributed to KyberDAO voters over the years.
More information about KNC can be found on the KyberSwap website.
6. Emission schedule
There is currently no automatic emission. All tokens for founders and advisors from the token sale have been distributed since September 2019.
~20M KNC is managed by KyberDAO as part of an ecosystem growth fund to facilitate trade and liquidity mining, and other growth activities.
KNC can be minted or burned by KyberDAO, subject to a DAO vote by KNC holders.
7. Token & protocol permissions and upgradability
KNC is an upgradeable token. The overall architecture for KyberDAO is largely based on Aave’s governance model with some differences/modifications such as the ability to enable the creation and voting of multi-option (generic, non-binary) proposals, and enabling the calculation of KyberDAO voting power based on a system that uses the current KNC staking model.
KNC is dynamic and can be upgraded, minted, or burned by KyberDAO to better support liquidity and growth.
The DAO has in-built governance safeguards to ensure that any decision or contract alteration will always be preceded by a suitable time period of preparation and reflection, as well as a minimum voter participation threshold. In addition, we have a 5/9 multisig with the role of a DAO operator that assists with operational tasks and ensuring the integrity of the DAO. The multisig comprises a mix of Kyber team members and founders of external DeFi projects with no direct affiliation to Kyber.
The Kyber team alone does not have the power to implement major changes to the KNC token, DAO, and the protocols in the network, without going through a DAO vote.
Changes to KyberDAO and KNC can only be made by the KyberDAO via voting on a Kyber Improvement Proposal (KIP).
8. Market data (Market Cap, 24h Volume, Volatility, Exchanges, Maturity)
Source: Coingecko
- Circulating market cap (20 Feb 2023): $144,248,888
- Daily trading volume (20 Feb 2023): $37,317,982
- Etherscan: 0xdeFA4e8a7bcBA345F687a2f1456F5Edd9CE97202
- Top exchanges are already supporting the latest version of KNC. KNC can be obtained on KyberSwap as well as centralized exchanges such as Coinbase, Binance, FTX, Crypto .com, OKX, KuCoin, Kraken, Huobi, Gate, Bitfinex, Bittrex, Bithumb, Upbit, WazirX, and eToro.
9. Social channels data
- Twitter: 242K followers
- Telegram: 13K members
- Discord: 14K members
- Forum: 580 members
- Youtube: 3.5K subscribers
- Facebook: 22K followers
- Reddit: 12.7K members
10. Contracts date of deployments, number of transactions, number of holders for tokens
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Token deployment date: Apr-12-2021 09:04:54 AM +UTC.
- Transaction hash: 0xf1558fa2757fc509172aab73bfbca6231f24005dcdb5fe9105fef05b91620ffd
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Number of Transactions (20 Feb 2023): 1,316,126
- Ethereum: 226,591 | 0xdeFA4e8a7bcBA345F687a2f1456F5Edd9CE97202
- Arbitrum: 30,937 | 0xe4dddfe67e7164b0fe14e218d80dc4c08edc01cb
- Optimism: 29,856 | 0xa00e3a3511aac35ca78530c85007afcd31753819
- BNB Chain: 256,788 | 0xfe56d5892bdffc7bf58f2e84be1b2c32d21c308b
- Polygon: 636,718 | 0x1c954e8fe737f99f68fa1ccda3e51ebdb291948c
- Avalanche: 135,236 | 0x39fc9e94caeacb435842fadedecb783589f50f5f
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Number of KNC Holders (20 Feb 2023): 28,685
- Ethereum: 14,161 | 0xdeFA4e8a7bcBA345F687a2f1456F5Edd9CE97202
- Arbitrum: 724 | 0xe4dddfe67e7164b0fe14e218d80dc4c08edc01cb
- Optimism: 485 | 0xa00e3a3511aac35ca78530c85007afcd31753819
- BNB Chain: 4,866 | 0xfe56d5892bdffc7bf58f2e84be1b2c32d21c308b
- Polygon: 7,877 | 0x1c954e8fe737f99f68fa1ccda3e51ebdb291948c
- Avalanche: 1,296 | 0x39fc9e94caeacb435842fadedecb783589f50f5f
Risk Factors / Smart Contract Audits
- KyberDAO and KNC audit by Hacken
- KyberSwap Classic audit by ChainSecurity
- KyberSwap Elastic audit by ChainSecurity
- Code is open source and can be reviewed on Github
Smart Contract considerations: KyberSwap smart contracts have been audited by Chainalysis and KNC and KyberDAO contracts by Hacken. Kyber is a mature DeFi project that has been operational for 4+ years with a long runway ahead.
Counter-party considerations: Decentralization and transparency are the guiding principles behind KyberDAO and KNC. KyberDAO is sufficiently decentralized as the Kyber team alone does not have the power to implement major changes to the KNC token, the DAO itself, or the protocols in the network, without going through a DAO vote. Changes to KyberDAO and KNC can only be made by the KyberDAO via voting on a Kyber Improvement Proposal (KIP).
A consensus from at least 5 members of the DAO Operator 5/9 multisig (comprising some external projects with no direct affiliation to Kyber) is required in order to even initiate a new proposal on KyberDAO.
Risk Matrix
20 Feb 2023
The Normalized Volatility is calculated by logarithmic percentage change taken from measurements taken on the KNC-USDT spot price every day.
- 1M: 0.030
- 3M: 0.049
- 6M: 0.073
- Average: 0.05
Suggested initial parameters
- LTV: 40%
- Liquidation threshold: 50%
- Liquidation bonus: 10%
- Reserve factor: 20%
Thank you for considering our proposal to add KNC on dForce!
