The team at Kyber Network (KNC), which allows users to exchange Ethereum (ETH) and other ERC-20 compliant tokens in a decentralized manner, recently announced several updates to their protocol and platform.
The Kyber Network team noted in a blog post:
“What a crazy few weeks and months it’s been in (decentralized finance) DeFi. Seemingly out of nowhere yield farming has exploded in popularity and caused all sorts of mayhem in the crypto world. Gas prices have shot up to previously unseen levels and in pursuit of high yields users are taking on higher risk to try out these experimental and in many cases unaudited contracts.”
The Kyber team explains that the KyberDAO (distributed autonomous organization) aims to serve as the “decentralized” governance mechanism for establishing the Kyber Network protocol parameters. During August 2020, the blockchain developers launched the mainnet of a new pool master in order to help KNC stakers with taking part in the KyberDAO in “a gas and time efficient way.”
The Kyber Network developers further noted that Unagii by StakeWithUS serves as a staking portal and pool master that KNC holders may delegate their tokens to, in order to cast votes on their behalf. KNC stakers need not vote on their own which means they aren’t required to pay gas fees. However, they’ll still get the same rewards as actual KNC stakers, the Kyber Network team claims.
They also mentioned:
“We understand the current high gas fees can reduce the net rewards for participating in the KyberDAO and therefore recommend stakers consider taking advantage of pool master services such as Unagii, the Kyber Community Pool, xKNC and others which reduce the need to transact and pay a gas fees.”
Participation in the KyberDAO and its supporting ecosystem “remains high,” the Kyber Network developers claim. (Note: more details about community engagement and KNC token management are available here.)
As mentioned in the blog post, the Kyber Network transacted “more volume in August 2020 than it did for the whole of 2019 ($397M in August vs $389M for all of 2019) and setting a new monthly all time high volume in the process.”
The Kyber team stated:
“We are impressed by this growth and it brings us ever closer to the day that decentralized liquidity providers like Kyber better centralized ones not just in technical architecture, but in liquidity and volumes.”
“[Ethereum] gas prices have become so high (due to yield farming, Tether activity, and Ethereum’s increasing adoption) that transactions are becoming prohibitively expensive to carry out for swaps below certain values. August was an especially expensive month with gas prices reaching 400gwei at some point (for context, gas prices for an average tx have historically been between a few gwei and less than 40 gwei) and looking at number of unique addresses, first time addresses, and total trades we can infer high gas fees have had an impact on Kyber Network on-chain activity.”
But high gas fees are a challenge not just for the Kyber Network, but for all dApps being built on Ethereum. The Kyber team revealed that they’re trying to work out a solution to improve Ethereum’s performance by adopting a “two-pronged approach” which includes many developers working towards the launch of ETH2.0 related developments.
ETH 2.0 will be a major system-wide upgrade to Ethereum which is scheduled for some point next year, or when community members agree that it’s the appropriate time to make changes. Kyber developers will also be looking at various layer 2 solutions developed on Ethereum that may offer more “immediate relief and bandwidth.”