Kyber Network is a decentralized exchange that allows you to easily trade any Ethereum-based token. Decentralized exchanges offer an alternative way to exchange cryptocurrency without having to trust a 3rd party to hold your funds and process the transaction.
Unlike centralized exchanges, decentralized trading platforms use smart contracts to operate as the 3rd party. Smart contracts are code that is uploaded to the blockchain to perform specific functions, such as market-making and settling blockchain transactions.
Brief History of Kyber Network
Kyber Network was founded in 2017 by Loi Luu, Victor Tran and Yaren Velner. Kyber Network is the protocol used to exchange Ethereum tokens, and KNC is the native cryptocurrency on the platform.
Developers use Kyber Network as a liquidity provider for their projects. This gives developers access to more liquidity, making it faster and easier for their users to exchange ethereum tokens. Since its inception, Coinbase Wallet, InstaDApp and Set Protocol have all used Kyber Network as a liquidity provider.
KNC (Kyber Network Crystals)
Kyber Network Crystals is the name of the native cryptocurrency to the Kyber Network.
KNC has 2 main forms of utility. Vendors, wallets and other cryptocurrency protocols that use the Kyber Network are required to pay fees in Kyber Network’s token, KNC. Additionally, KNC is used as a governance token. This means that users who own KNC have voting rights proportional to the amount of KNC they own.
How Kyber Network Works
Kyber Network works by aggregating funds that users stake for rewards. This aggregate of funds is called their “reserves,” and users who stake their cryptocurrency on the network earn profits from the spread, the difference between the buy and sell price.
Kyber Network provides value to both retail and institutional users. Vendors can set up instant swaps on Kyber Network to be paid in their preferred cryptocurrency. Retail cryptocurrency users are also turning to decentralized exchanges because they offer a trustless, secure network that allows users to truly own their crypto assets.
Because Kyber Network is decentralized, all voting happens on the blockchain. If a proposal gets voted on and is passed, then the network will update in correspondence with the proposal.
How to Buy Kyber Network (KNC)
- Open an online account.
If you want to buy Kyber Network Crystals you will first need to make an account with a cryptocurrency brokerage that supports KNC. Binance and Houbi are exchanges that support KNC. Before connecting your bank account, you’ll have to provide the exchange with certain information.
Typically, you need to provide your legal name, address, email, phone number, photo ID and Social Security number to make a crypto brokerage account. Depending on the exchange, however, there are different levels of verification needed to begin investing.
Alternatively, you can use KyberSwap to buy Ethereum with a credit card and then exchange your Ethereum for KNC on Kyber Network. Once you’re on the Kyber Network you have access to trade any token on Ethereum’s network.
- Buy a wallet.
After you’ve bought your KNC on an exchange, you need to decide where to store your tokens. Some people store their cryptocurrency on the exchange they buy it from, but this isn’t recommended for security reasons. Software wallets like Argent and Metamask are good choices for a lot of people, as they’re free and easily accessible. If you want to secure your crypto in the safest way possible, however, then you need to get a hardware wallet.
Hardware wallets are a way to store your crypto offline. They are physical devices that securely store your cryptocurrency on an encrypted device. Crypto investors who put significant amounts of money into cryptocurrency often buy hardware wallets because they cannot be hacked.
- Make your purchase.
Once you’ve completed all the steps to make a cryptocurrency brokerage account, you’ll need to make your purchase. If you want to limit risk on your KNC position, then you should average your buy-in price.
Averaging your buy-in price is when you purchase different amounts of KNC at different times, as opposed to buying your entire position at once. This alleviates some risks associated with short-term price fluctuations. If you want to invest on a schedule, you can set up recurring buys on Coinbase.
Like stocks, you can place your order on most exchanges as either a limit order or a market order. When you place a limit order, you set a price to buy the token at, and your order will only be filled once the market price drops to the price you set your limit order to. Conversely, when you place a market order you buy the token at the current market price of the asset.
Best Cryptocurrency Exchanges
Not sure where to start your search for the right broker? Binance and Binance.US are 2 of the best exchanges offering KNC trading.
Best Crypto Wallets
Browse a few of our favorite online and offline wallet options below to get started.
Best Hardware Wallet: Ledger Nano S
The Nano Ledger S is a popular choice among crypto investors because of its ease of use and security. This USB-shaped device can hold Bitcoin, Ethereum, ERC-20 tokens and several other cryptocurrencies. Also, Nano has a great customer service team that can help you troubleshoot any mishaps you may encounter.
Ledger also offers an application to manage your crypto holdings that is intuitive and easy to use. Also, the Ledger Nano S is secured by an offline, encrypted chip and an 8-digit passcode for industry-leading security.
Best Software Wallet: Coinbase Wallet
Coinbase Wallet is a separate application from the Coinbase exchange that is dedicated to cryptocurrency storage. With Coinbase Wallet, you truly own the cryptocurrencies in your wallet. This is different from cryptocurrency exchanges –– if you store your crypto on an exchange, your cryptocurrency is held by the exchange itself.
Another benefit to Coinbase Wallet is its great security. Coinbase Wallet lets you manage your own private keys and has industry-leading security standards such as 2-factor authentication.
With the Office of the Comptroller of the Currency (OCC) recently granting authority for federally chartered banks to use stablecoins to transfer funds, decentralized finance is gathering more and more interest. As this interest in decentralized finance grows, so will platforms like KNC that offer liquidity solutions to the decentralized finance industry.
Trade or Sell Your Cryptocurrency
After placing your order to buy KNC, you should typically see the tokens be credited to your exchange account within a few minutes. It’s not recommended you keep your KNC or any other cryptocurrencies on an exchange unless you are actively trading.
If you plan on holding your KNC for the short term, a software wallet will generally be enough. However, if you intend on keeping your KNC for the long term or buy a significant amount of the token, use a hardware wallet. Hardware wallets securely store your crypto offline, so it can’t be accessed by hackers. When you decide you want to trade your KNC, all you need to do is plug in your Ledger Nano S to your laptop and send the tokens to the exchange you’ve made an account with.
Current Crypto Prices
Before purchasing your KNC tokens, you may want to watch the cryptocurrency markets to get an idea of where cryptocurrency prices are going. As a general rule of thumb, watching Bitcoin is a good indicator of the general health of the cryptocurrency markets. You can check out some top cryptocurrencies and their prices below to get an idea of how the markets are moving.
Kyber Network’s Effect on Decentralized Finance
Kyber Network aims to be the No. 1 provider of decentralized liquidity on Ethereum’s blockchain. With the price of Ethereum reaching an all-time high and its tokens steadily gaining traction, protocols like Kyber Network that are built on Ethereum have a lot of potential to grow this year.
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