The creators of Oyente and Smartpool have officially announced KyberNetwork, a new trustless, decentralized platform that will allow for instant trading and conversions between any crypto-assets. KyberNetwork uses an innovative approach that incentives reserve managers to guarantee liquidity and enables trustless and instant convertibility of any tokens. KyberNetwork also allows for complex financial instruments like derivative options and forward contracts.
KyberNetwork is coming at a time when the ecosystem of crypto-assets is exploding in its diversity and sheer number of tradable tokens and currencies. As more and more projects raise funds through the launching of platform tokens, the number of tokens in the market is continuing to increase. However, the limited options to liquidate tokens in the market makes convertibility of one token to another token a new challenge for both investors and operators alike.
Despite the decentralized and trustless nature of crypto-assets, the majority of trading of these assets is done on centralized exchanges, which are subject to internal fraud and external hacking, as evidenced by the almost monthly headline news reports.
Decentralized exchanges offer clear advantages, however the existing offerings on the market now fail to address the primary issue that is plaguing them: liquidity. A system with high liquidity would enable instant transactions on the block time that can be achieved securely and completely decentralized for any type of asset.
KyberNetwork solves this issue by introducing a new system for any user to trade any token instantly and completely securely with guaranteed liquidity. Their approach is through the utilization of reserve managers, who are incentivized by monetizing their otherwise idle assets. By serving trade requests from users, reserves earn profit from the spread determined by reserve managers. As the network gains more traffic through collaborations with wallet providers and various other token projects, reserve managers will benefit directly from the trading volume due to network effects within KyberNetwork.
The result is that KyberNetwork users can instantly trade any asset on the platform: someone can send token A to an intended recipient who wishes to receive the payment in token B in a single transaction, instantly on the block time.
Fast and Secure Transactions
KyberNetwork is block-instantaneous and it significantly reduces the buffer between when an order is made and when it is filled. As soon as the transaction which initiates the order gets accepted into a block, the trade is confirmed. This feature offers users greater trading security as it eliminates the vulnerability a result of the acceptance window of transactions that could be exploited by attackers. By design, KyberNetwork operator does not hold users’ tokens and orders are enforced by smart contracts, so these tokens are secured from theft losses
API’s Enable Payments in any type of Crypto Token
KyberNetwork will also introduce a new smart contract interface that will allow existing wallets, which only accept certain specific tokens (e.g. one that only accepts REP, GNT, etc. but not others), to receive any existing or future token (e.g. PAY and CVC) without having to modify the token contract code (i.e. the recipient is not aware that the payment actually was proxied via KyberNetwork). In other words, it enables smart contracts and recipients to access a wider class of users and receive contributions and payments from any token that the platform supports.
Hedging Options and Forward Contracts
The illiquidity of crypto-assets results in highly volatile exchange rates between tokens due to irregular and unpredictable supply and demand. What’s more, unless the trading volume of a token is significant, hardly any exchange would warehouse the tokens, limiting token holders’ options to trade or liquidate a particular token. As a result, it is impossible for token holders to hedge their positions to reduce the risk of adverse price movements in the future.
KyberNetwork addresses this challenge by introducing derivative trading, including options and forward contracts.
Options – Option contracts allow users to hedge against adverse price movement for a fee known as a premium. A “call option” gives the owner of the contract the right to purchase a crypto-asset at an agreed price, while a “put option” allows the owner of the contract to sell a crypto-asset at an agreed price. The premium here will be calculated using the implied volatility of the underlying crypto-asset.
Forward Contracts – In a forward contract, involved parties agree to execute a trade at a later date at a price specified in the present. Forward contract will be useful in a case where token holders need a specified amount of tokens at a future date. For example, assuming that Alice has Melon tokens and she wishes to acquire some Ether to invest in an upcoming ICO in three weeks’ time. Her option is either to exchange Melon tokens for Ether now, or she could enter and purchase a forward contract due in three weeks to negate the risk of Ether’s price fluctuations, should she wish to hold on to her Melon tokens for a longer time or she is waiting for an event where she would receive her Melon tokens.
KyberNetwork will soon be releasing on testnet with their token launch event scheduled for later in 2017. They plan to engage several blockchain entities to jointly set up reserves in anticipation of trading demand, as well as to extend the influence and vision of KyberNetwork throughout the blockchain ecosystem.
- UC Berkeley Opens New Blockchain Lab – Steve Chen Appointed to Co-Lead Newly Formed Berkeley Blockchain Lab – December 10, 2017
- Peter Vessenes Announces Deluge Network To Support a Safe and Direct Way to Contribute Bitcoin Directly to ICOs – December 5, 2017
- EXMO Launches Token Sale with Blockstarter’s ICO Solution – December 5, 2017
- AdHive, A Blockchain-Based Native Advertising Platform, Engages with WINGS DAO Platform – December 5, 2017
- Perkins Coie Adds SEC Attorney in San Francisco with Fintech and Blockchain Experience – December 5, 2017
- Cryptocurrency Monero Announces Breakthrough Online Shopping Initiative Featuring Top Global Artists’ Music and Merchandise – December 5, 2017
- Bitcoin for a ‘bit’ of Caribbean paradise – December 5, 2017
- With the Launch of SunCoin, Solar Bankers Takes On the World’s Energy Giants – December 4, 2017
- Blockchain News Is Merging With Token Report – November 30, 2017
- Mira launches Pre-ICO for Mira – an Easy and Convenient Way to Buy, Store and Send Cryptocurrency – November 23, 2017
- Dash and KuvaCash Partner to Fight Inflation in Zimbabwe with Cryptocurrency – November 22, 2017
- INS Ecosystem Partners with Ambrosus to Overhaul the Grocery Supply Chain – November 22, 2017
- Global Debt Registry Unveils Collateral Pledge Blockchain Proof of Concept – November 22, 2017
- Ripple Appoints Former New York State Superintendent of Financial Services Benjamin Lawsky to Its Board and Ron Will as CFO – November 22, 2017
- Advised by the Co-Founders of YouTube and Twitch, Theta Announces a Blockchain-based Video Delivery Network – November 22, 2017
- Modex adds top advisor from Google ahead of ICO – November 22, 2017
- Decentralized Ad Exchange AdEx Partners with INK to Handle the World’s First Blockchain-based Ad Auction – November 22, 2017
- Zilliqa Lowers Funding Cap Despite Heavy Demand from Investors – November 22, 2017
- Health Startup Etheal Combines Blockchain Technology with Micro-Incentives to Build a Peer-Reviewed Global List of Health Professionals – November 22, 2017
- Bitquence Rebrands as Ethos.io, Charting a Course to Unlock Crypto and the Future of Investment for the Masses – November 22, 2017
- Eidoo Introduces User Friendly ICO Engine – Allowing Crypto Startups To Launch And Manage Their Own ICOs For Fundraising On The Blockchain – November 22, 2017
- Simdaq Launches Social Platform for Democratisation and Development of Cryptocurrency Trading – November 22, 2017
- Gameflip Shatters FLIP Pre-Sale Goals, Sets Sights on December 4, 2017 ICO – November 22, 2017
- Golden Alliance Gold Mining Launches Token Sale – November 22, 2017
- Genaro and Storj Labs Announce Collaboration and Product Integration – November 22, 2017
- Metal (MTL) Now Available on the Chinese Cryptocurrency Exchange – November 22, 2017
- Mark.space & Jaguar Land Rover Announce Cooperation – November 22, 2017
- Exscudo – EON Testnet Was Successfully Updated – November 22, 2017
- Valorem Foundation Launches All-new Cryptocurrency Platform – November 22, 2017
- WAX Partners with Xsolla to Offer Its Platform to More Than 2,000 Video Games – November 22, 2017
- Brave expands Basic Attention Token platform to YouTube – November 22, 2017
- Narrative Launches Blockchain Based Social Network That Puts Revenue In Your Pocket, Not Mark Zuckerberg’s – November 22, 2017
- Gladius Uses Blockchain and Spare Bandwidth to Revolutionize Cyber Security – November 22, 2017
- Indorse Announces Partnership with App Store Cryptocurrency, AppCoins, ahead of MVP Launch – November 22, 2017
- Secutix And The Paléo Festival Nyon Announce The Success Of Their Blockchain Pilot Project – November 22, 2017
- ING launches major addition to blockchain technology: Zero-Knowledge Range Proof solution – November 22, 2017
- Cofound.it Announces Teams Participating in Upcoming Live Crowdsale Event – November 22, 2017
- PUBLIQ goes public: The blockchain and AI company that fights fake news announces the start of its Initial Token Offering – November 22, 2017
- Blockchain for Business SophiaTX Reveals New Details of Platform; Confirms Date for Token Generation Event – November 22, 2017
- BCShop.io Launches Partner Program – November 22, 2017
- World’s First Social Entrepreneurship Platform Moms Avenue Challenges Etsy by Gearing Up With Blockchain – November 21, 2017
- WAX Partners with Xsolla to Offer Its Platform to More Than 2,000 Video Games – November 20, 2017
- Pundi X integrates NEM blockchain to Bring Cryptocurrency Payments Into Retail Stores – November 20, 2017
- Fujitsu Develops Security Technology to Safely Connect Blockchains – November 20, 2017
- Jibrel Network Announces a Highly Successful Pre-sale Round – November 20, 2017
- KRAFTWERK on Blockchain – November 20, 2017
- MintHealth: Empowering Patients to Take Control of their Health and Data via Blockchain Technology – November 20, 2017
- IBM Completes PoC Of Blockchain-based Shared KYC With Deutsche Bank, HSBC, MUFG And Cargill, IBM Treasuries – November 20, 2017
- LetsEnhance.io to process images on Neuromation Platform – November 20, 2017
- Blockchain And AI Researchers Propose A New Model To Return The Control Over Human Life Data To The Patients And Accelerate Biomedical Research – November 20, 2017
View All Articles