On October 18th, Team Atomic had an AMA session with Kyber Network, an on-chain liquidity protocol that aggregates liquidity from a wide range of reserves, powering instant and secure token exchange in any decentralized application, in our Telegram Chat. Most of the team members of the Kyber Network were present on the discussion with our community.
Here are the essential points of the AMA session:
Please welcome the Kyber Network team (KN) and the questions from our Telegram chat members (Q).
Q: Since starting the project, did you achieve everything you planned or did you have to make drastic changes to your main idea at the start and what makes your project better than your competitors?
KN: The Kyber model hasn’t changed much since it was first conceptualized back in 2017. I would say, we definitely had to work hard on liquidity since the DeFi narrative took shape in Ethereum. What sets us apart from others I guess is that both rates and liquidity are on-chain for Kyber. Everything is on the smart contract, which makes it easier to integrate.
Q: What’s the difference between Kyber Network and Changelly? Kyber Network purely deals in Ethereum. What do you think about the future of Ethereum? Do you see a positive one?
KN: Kyber Network is non-custodial and completely on-chain via smart contracts. Ethereum has been the pioneer for smart contracts. We look at Ethereum positively as it has a flourishing developer community.
Q: What’s special about your security? What makes you confident that it is safe? Please tell us more about the security of Kyber Network.
KN: Our smart contract code is all on-chain, open-sourced, and verified on Etherscan as well, so anyone can verify our smart contracts. In addition, our smart contracts have been verified by reputable firms such as ChainSecurity. We do provide a bug bounty as well should any bugs be discovered. Compared to other centralized solutions, everything is on-chain.
Q: How will Kyber Network detect and prevent spam transactions?
KN: We are a dApp-built and deployed on Ethereum so we get our security from the Ethereum blockchain. As long as Ethereum is secure (and we think it is second in security only to Bitcoin out of all the blockchains) then Kyber is secure as well. In terms of a 51% attack by buying up 51% of KNC, this would not change the functioning of the smart contracts in any way.
Q: To what extent can Kyber Core Smart Contracts be considered safe? Can normal users be suppliers of token reserves? Any necessary requirements to meet?
KN: The smart contracts have been audited by multiple respectable audit companies (including ChainSecurity), and we’ve had $350M plus volume flow through them without any issues since launch so we’re pretty confident our smart contracts are very safe. Of course, all the code is available online for anyone to verify. And in any case, as a non-custodial exchange, only you or the other side of the trade ever holds custody of the funds, Kyber smart contracts never hold your funds so the risk is minimized.
Q: The reserves are required to trust the Kyber’s administrators. Can you explain more about anything we could pre-protect about the reserves?
KN: There is a permission and permissionless way of adding reserves. Permissioned method is for tokens that would want to be listed in regulated services, such as KyberSwap. Anyone can create a permissionless reserve. Reserves have full control of their own reserve contracts and funds.
Q: There is a lot of DEX projects going on. What do you think of the competition compared to Kyber?
KN: We welcome all kinds of different solutions to the DEX space. The more liquidity they provide, the more we can provide because we pull in liquidity from these decentralized exchanges (i.e. Uniswap, Oasis/Eth2Dai, DutchX, and Bancor). These all push liquidity to Kyber. We aggregate all this liquidity through our smart contracts.
Q: What is meant by Kyber Promo Codes? Where I can get or collect Kyber Promo Codes? What’s the main purpose of these promo codes?
KN: Kyber Promo Codes basically means a marketing product that is meant to create more awareness of Kyber’s decentralized exchange. You can get it if you attend an event or meetup by Kyber. The purpose of these codes is also to let users try out our DEX which is in web and mobile apps.
Q: With volumes on decentralized exchanges being considerably lower than those on centralized ones, do you believe that people tend to choose convenience over trust? What do you think will turn the tables?
KN: As the crypto industry, we’ll work until the convenience is just as good, if not better than conventional exchanges. There’s no reason why this can’t be achieved with all the different tools we have. We just need time to improve on them since crypto is still in version 0.9.
Q: What kind of impact will the upcoming Istanbul Hard Fork have on Kyber and how do you plan to fix it?
KN: Due to the Istanbul Hard Fork, gas prices for doing trades on Kyber may increase by ~30%. We are currently working on our next version of smart contracts to support other major features and also other gas optimizations.
Q: Can we swap our cryptocurrencies/tokens directly from hardware wallets without sending funds to 3rd party? Are there any plans to integrate KyberSwap Function in Atomic Wallet?
KN: Kyber is completely non-custodial. At no point do we hold the user’s funds. You can definitely use your hardware wallets, such as in MyEtherWallet (MEW) or in KyberSwap for doing your token swaps. As for integration, we can work closely with Atomic Wallet for future integration. Stay tuned!
Q: I want to convert tokens from my personal wallet without connecting to the Kyber website. Does KyberSwap support a token swap? How do you deposit into wallet X and receive money at wallet destination Y?
KN: Yes, you don’t need to go through the KyberSwap website. You can interact directly with the Kyber Network smart contracts, but this requires a bit of technical knowledge.
Q: What is meant by Wrapped ETH (WETH)? Why I should convert my ETH to WETH for placing a limit order in KyberSwap?
KN: WETH is the ERC20 token representative of ETH. The limit order feature only works with ERC20 tokens. As such, you have to wrap your ETH to WETH.
Q: What advice would you like to give to dApp developers who are looking to develop DeFi dApps on Kyber or to integrate Kyber protocol into their project?
KN: Our advice would be to go through our developer portal and join our developer community on Telegram. We are incredibly happy when people develop with Kyber and have over 70 different projects already live with Kyber integration. We love to see what people build using Kyber as a liquidity source.
Q: What types of integration are there and what features they have?
KN: Anything that has value exchange can benefit from using Kyber. If you have a scenario where your dApp accepts a token, with Kyber, your dApp can accept any token (i.e. I can send any token I want to buy an NFT, and the seller receives it in any token they want, i.e. DAI, USDC, TUSD). Or you can build more complex DeFi dApps that create 3x or 5x leveraged positions by converting ETH to DAI and vice versa. There are a dozen different use cases for integrating Kyber.
Q: Kyber protocol only supports ERC20 tokens and it’s deployed in EOS and TomoChain as well. Does Kyber have any plans of deploying it on more blockchains like Tron and others?
KN: Yes. Currently, the Kyber protocol is deployed in Ethereum, EOS, and TomoChain. We have released our protocol specification such that anyone can take the protocol and deploy it in other major blockchains. We are definitely evaluating other major blockchains with smart contract capabilities. We have been building our Waterloo project to support cross-chain relays. Right now, it supports ETH<>EOS. We hope to have this to support other chains. The long term goal is to be able to support cross-chain swaps across different major blockchains.
Q: How does Kyber Network Reserves give liquidity to exchanges and how are reserves better than order books? How is Kyber Network changing the new DeFi ecosystem and what’s the plan for the next few years?
KN: Kyber Reserves who provide token liquidity to Kyber protocol earn the small spread from every transaction. Reserve could be Market makers, token projects, whales, etc. They provide the liquidity to Kyber pool with certain price and Kyber smart contract will pick the best rates for the end-user to swap token A to B. In this case, users can make the instant token swap w/t waiting for the order book to fulfill. Liquidity is a very important factor in finance, even if you look at the traditional finance industry, the asset liquidity impacts the market hugely in any way. Kyber we are providing decentralized liquidity to DeFi project to facilitate their service seamlessly which will lead to mass adoption.
Q: There are 3 core issues prevalent in crypto and blockchain: Security, Interoperability, and Scalability. (1) How does KNC plan to overcome these issues? (2) How many wallets that can support KNC until now? And do you have any plans to build your own wallet? (3) Do you have any plans to attract non-crypto investors to KNC and how? What are the actions to increase awareness around KNC in non-crypto space?
KN: (1) The core issues related to the blockchain, so it’s up to that chain to tackle those issues, not us. However, we’re exploring various L2 solutions. I think an optimistic rollup seems promising. (2) Not sure. I don’t know the count. We work with multiple wallet providers already, so I don’t see the need to build our own. (3) Marketing.
Q: Currently, many swap networks support Bitcoin (BTC) to another blockchain. Why Kyber Network swap only supports Ethereum blockchain? Do you have plans in the future to provide swap services to other blockchains?
KN: Other solutions are mostly centralized and custodial. We are working on a more decentralized and non-custodial model, where everything goes through a smart contract. As Ethereum is the pioneer in smart contracts for blockchain, it was natural for many of these projects to start there. As for providing the Kyber protocol in other smart contract chains, this is definitely possible and addressed in an earlier question.
We were glad to host Kyber Network on our Telegram. Thanks to the team and all the members of the session!