Kyber Network ICO Review – KNC Investment Analysis

https://kyber.network

ICO Details

Symbol – KNC

WhitepaperLink

Where – The ICO will take place on https://kyber.network

When – Sunday, September 17th

How to Participate – KNC tokens can be bought by contributing ETH (Ethereum) tokens

Soft Cap – None

Hard Cap – 100’000 ETH (33 Million USD)

Total Max Market Cap At ICO – ~110 Million USD including company allocation/founder and seed investor allocation (provided presale rates = public sale rates)

Exchange Rate: 600 KNC per ETH

Total Tokens in Circulation At ICO – 192 Million KNC


Overview

Kyber Network is a decentralized exchange (of which there has been a recent rush of competing teams) and liquidity platform that aims to provide users with atomic swaps of different forms of cryptocurrencies (currently slated to function only with ERC-20 tokens), as well as providing an API for different software and projects to run on the network. Kyber also has many conventional functions that are home to traditional stock trading, such as options trading.

A simple use case for Kyber would be a digital storefront that sells their goods and accepts cryptocurrency – with Kyber, the business could accept any supported token (Kyber will add non-ERC-20 tokens in the future) and instantly convert those assets into a desired asset, for example Ether. While services such as Shapeshift and Changelly already exist for this kind of operation, Kyber makes it seamlessly applicable to a given smart contract, as well as providing a much larger amount of liquidity for users of the platform (Shapeshift and Changelly at times can have wildly varying spreads due to this problem).

Kyber shares this concept space with several other projects, including its most closely related competitor, 0x, as well as most other decentralized exchange blockchains.

ky3.jpg


Notable Team Members/Advisors

Yaron Velner

Yaron.png

Yaron Velner worked as a software engineer and technical conductor at EZ Chip, who was later bought out in an acquisition by Mellanox Technologies (currently valued at 2.2 billion US Dollars). He also has a Ph.D in Computer Science, having written several papers, mainly dealing with formal verification (a focus of Tezos) and a game theory dissertation.

Vitalik Buterin

vitalik-buterin.jpg

Vitalik Buterin, founder of Ethereum and the father of Smart Contracts, has pushed his support as an advisor for the Kyber Network project and is in close relations with the team regarding technical directives, design, and consultation.

 


Positives

ky2.jpg

 

First and foremost, KyberNetwork is an exchange. Unlike most exchanges, however,
KyberNetwork performs trade requests instantly. Moreover, KyberNetwork does not hold users’ tokens, thus any theft or loss of tokens is prevented by design.

This is in sharp contrast to most exchanges where confirmation time of several minutes is typically needed. Any malfunction during that period could potentially result in inconvenience or in the worst case scenario, loss of funds.

In a vast sea of similar projects, Kyber has several advantages that put it above the rest. Firstly, their protocol does transactions on chain – compared to platforms such as 0x, who do this off-chain, it has a more transparent format. Putting this kind of information on the blockchain can also give valuable data and insight to a company building software on top of their platform, and thus it might have a natural advantage over a more obfuscated off-chain solution.

Kyber also has an advantage of their tokens – while 0x tokens only have use for governance of the chain (one can also charge fees to use the 0x platform, but based on its competitive nature, I expect those fees would end up being close to 0, adding no value to 0x tokens), Kyber Crystals will also pay out their liquidity providers in dividends:

Contribute some amount of tokens of a certain token type to the reserve. For every contribution, the contributor will receive some amount of KyberNetwork Crystals (KNC) to represent their contribution to the platform.

Dividends are distributed proportionally to the contributions of the > contributors. The exact formula to distribute the platform profits > will be available in the next version of the paper.


Negatives

 

Kyber’s roadmap has intentions of releasing the first basic version of the network in the first quarter of 2018 – while this is relatively soon, other projects such as 0x are a step ahead of Kyber as they already have their platform out and working. Because of this, Kyber will not be first-to market, and will likely suffer a decreased level of hype coming into this sale.

Secondly, Kyber is only selling around 30% of their total tokens to the public as part of their 32 million dollar ICO. This is rather low considering they sold another 30% or so off to presale investors – ultimately this project will be controlled by larger whales, for better or for worse.

Finally, Kyber’s advantage may also be a double-edged sword. On-chain transactions are specifically avoided in most cases simply due to the time it takes to generate proof of work and embed the transaction in a block-chain. It remains to be seen how fast and efficient Kyber will be compared to 0x, and this will be a large deciding factor in the future success of the platform.

 


Conclusion

Kyber is an interesting project, because it provides another possible platform for software creators and the like to utilize when using the power of the blockchain. It’s likely worth much more than a mere 30 million dollar ICO (100 million max), but the market may simply decide that 0x will fulfill the niche that Kyber is looking to fill just fine by itself. Still, it could work out the other way, or these two projects might both have their own strengths in the space. Look to invest, but don’t look to put all your eggs in this project.

Investment Grade: 65%

4 thoughts on “Kyber Network ICO Review – KNC Investment Analysis

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