Instant Digital Asset Exchange Service Kyber Network Reports All-Time High $858M Trading Volume for January 2021

The developers of the Kyber Network (KNC), which provides a tool that allows traders to exchange tokens instantly without having to use exchanges, have published their Ecosystem Report for January 2021.

As confirmed in the update, Kyber 3.0, the “most ambitious and important change” to Kyber Network has been launched. 

Deniz Omer, Head of Ecosystem Growth at Kyber Network, and CEO & Co-Founder of Cryptodyssey.Capital, writes in a blog post:

“Consisting of a major architectural overhaul, this upgrade will shape Kyber’s future and allow a new wave of innovation to take place previously not possible on the existing infrastructure. The major overhaul is being accompanied by a dynamic automated market maker built from the ground up by the team and a KNC migration proposal that puts KNC at the heart of the KyberDAO (distributed autonomous organization).”

Omer explained that the easiest way to think of the upgraded and brand new architecture is as a hub of “multiple purpose-built liquidity protocols.” Automated market makers or AMMs, derivative protocols, professional market maker protocols, new and novel protocols, can all “feed liquidity to Kyber,” Omer added. 

He also mentioned that on the taker side, traders, end users, and (decentralized application) dApp integrations can “take liquidity directly from specific protocols that meet their needs (thus benefiting from gas optimization amongst other technical benefits) and overall, the new model is much more flexible to both takers and makers.”

He also noted that the new dynamic automated market maker (DMM) is “a first” in DeFi with its programmable “curves” and dynamic volume-based fees and will aim to bring enhancements in capital efficiency and “impermanent loss.” As has been “long requested by our community, it will also be completely permissionless,” Omer claims.

He added that with these updates, the KyberDAO will have an “enhanced role in overseeing and governing this network.” It will be responsible for “incentivizing new liquidity protocols to join and grow the network and will have the power to determine how value is captured and how fees are distributed.” To fully realize these capabilities, the Kyber Network developers and community are also proposing an update to KNC itself.

As noted by Omer:

“Getting all this right is very important to us and we’ve therefore launched a new governance forum, gov.kyber.org, where we can have an open dialogue with you, our community, and get feedback on our ideas and proposals. We believe these changes will usher in the next period of growth for Kyber Network and together with a strong community we look forward to continuing to build the future of Decentralized Finance.”

He added that the Kyber team encourages you to read their complete Kyber 3.0 blog post here and also go over to their Discourse forum here in order to take part in the ongoing KNC Token Migration and Upgrade discussion.

Omer pointed out that digital asset markets have seen a dramatic amount of trading activity during the past few months and this was “especially evident in January’s volume data.” Kyber Network saw “a new monthly all time high volume of $858M, more than doubling its previous all time high from December,” Omer revealed. 

While these are quite solid figures and long-term trends have seen “a 10x increase in volume every year since launch,” the Kyber team is aware that the competition in the liquidity provision space is “heating up” and Kyber “needs to aim much higher,” Omer noted. 

He added:

“With DeFi activity at an all time high it’s not surprising 1inch, Fulcrum, and DeFiSaver have taken the top spots of the Kyber volumes table. DEXs on Ethereum in general have carried out more than $55Bn in trading volume in January and this is a testament to how far this space has come over such a short period of time.”

He continued:

“This increased liquidity has mostly been served by professional market makers who now make up 75% of all trades on Kyber while the Curve bridge is another popular source of liquidity accounting for almost 20% of total network volume.”

Stablecoins still make up most of Kyber’s trading volumes with Wrapped Bitcoin (wBTC) in second place and several other major ERC-20 tokens rounding up the remaining top crypto trading pairs, Omer confirmed.

While sharing other notable Kyber ecosystem updates, Omer noted:

With 60M KNC worth $114M currently staked in the KyberDAO, “the current fee distribution to Kyber Network stakeholders as decided by the KyberDAO in the latest epoch are as follows:

  • 6.2% “burn (% of ETH rewards converted to KNC and burnt)”
  • 67.32% reward “to KNC stakers who vote in the KyberDAO (rewarded in ETH)”
  • 26.48% rebate “to FPR liquidity providers (rebate in ETH)”
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