Michaël van de Poppe - 24 August 2022
A flexible DEX: KyberSwap
Kyber has been receiving a fair bit of attention lately because of the launch of their Elastic Farms. The new functionality which is derived from Uniswap’s V3 functionality has brought more users to the DEX. Let’s have a look at what the DEX has to offer over its competitors and how it might perform over time.
KyberSwap is DEX and a liquidity provider platform with capital efficient liquidity pools. The platform aims to give users the best prices and a smooth swapping experience. Additionally, it simultaneously focuses on raising revenue for liquidity providers (LPs).
Kyberswap is a liquidity aggregator which has its own AMM. Additionally, it also routes the liquidity from other exchanges to give the best price for swapping.
Kyberswap Elastic & Uniswap V3
On July 7, Kyberswap announced a new protocol; Kyberswap Elastic. Kyberswap Elastic allows liquidity providers to use concentrated liquidity and flexibility in their earning strategy. Concentrated liquidity enables adjustments in the price range for liquidity providers. As a result, liquidity in the pool is used more efficiently, mimicking much higher levels of liquidity and achieving better slippage, volume, and earning for LPs. Kyberswap Elastic gives a high level of management control on Impermanent Loss thanks to adjustable swap fees you are going to earn against your Impermanent Loss.
After the team launched Kyberswap Elastic, people started talking about it as a Uniswap V3 fork. However, that is not true because Uniswap V3 codes are not fully open source, and it is restricted to use until 2023 for copyright reasons.
Aside from that, there are two core differences between Uniswap V3 and Kyberswap Elastic. The first one is that Kyberswap has compound ability on fees, but Uniswap V3 does not. Secondly, Kyberswap Elastic has sandwich attack protection, and Uniswap V3 does not.
The trading volume has been increasing in recent weeks on Kyberswap Elastic. It shows that adoption is growing.
KNC is a utility and governance token and an integral part of Kyber Network. It connects different stakeholders in Kyberswap's ecosystem. KNC holders stake and vote to receive trading fees from protocols in the network. More rewards are generated as more trades are executed, and new protocols are added.
On the 15th of August, Kyberswap strategy member Shane made a proposal requesting a 900k OP tokens. The team asked for OP incentives to drive user, liquidity, and ecosystem growth. The next day, Kyberswap announced a partnership with Lido Finance to enhance liquidity on Polygon.
The protocol also integrated Chainlink price feeds on Arbitrum, Avalanche, BNB Chain, Ethereum, Optimism, and Polygon on the 18th of August. Kyberswap has expanded to 12 chains and makes new partnerships which it launches with liquidity incentives frequently.
Kyberswap is basically an improved DEX thanks to its routing liquidity technology and liquidity providing platform. However, it gives beneficial token prices for traders and more control over fee earnings for liquidity providers. Kyberswap Elastic is a successful upgrade for the platform in general, and it is active in 12 chains now.
Following the recent developments, it is evident that Kyberswap is getting attention from many DEXs, and they support the Kyberswap integration for their network. It would likely be a good candidate to invest in if the adoption continues on that path because the Kyberswap Elastic update is working well, and the team continues to deliver with good partnerships and integrations for the protocol.