Heard of DEX aggregators? Well, I’m sure you have. At some point in the bull market, you’ve likely used 1Inch, ParaSwap, or perhaps even DeFiLlama’s DEX aggregator. However, all these protocols are simply DEX aggregators. They find the best routes to facilitate swaps without users having to navigate multiple sites. Liquidity remains a huge problem.

But what if there was a DEX aggregator that was vertically integrated and acts as the liquidity backbone of many chains? Yep, that’s right, it’s KyberSwap.

In this article, we’ll dive into:

• House Of Kyber - The Defi Powerhouse

• Adoption Wheel

• The Robots Are Here

• Breaking The Trend

• Finding That Edge

The House Of Kyber

Kyberswap is a DEX aggregator currently deployed on 15 chains. In fact, they ship so fast that the infographic I pulled below is wildly outdated already. Their core product aggregates liquidity from over 80 DEXs and has helped facilitate over $20B in trading volume.

Liquidity provision

KyberSwap’s LP solution is home to a wide range of technical innovations. These 3 solutions:

• Dynamic Fees Implementation

• Amplification Factors

• Virtual Balances

create a heavily optimised and profitable experience for the liquidity providers.

KyberSwap Classic protocol’s innovative first implementation of dynamic fees, which adjusts based on market conditions, has been widely copied by many other DeFi protocols such as Curve and Trader Joe. This speaks volumes about the effectiveness of this solution.

So how does this work?

The dynamic fees evaluate the long term and short term onchain volume of specific pools, then uses the differences to dynamically adjust fees anywhere from 2bps to 60 bps. So during periods of extreme volatility or high volume, pool fees are increased, and vice versa, during periods of dry volatility or low volume, pool fees are drastically decreased to encourage trading volume.

This increases the profitability for LPs and incentivises continued trading even when markets are slow. Importantly, this also helps counteract some of the impermanent loss that LPs have traditionally faced, while also mimicking the wider bid-ask spread that traditional market makers offer during periods of heightened volatility.

Just when you thought that was enough, KyberSwap classic also features programmable pricing curves with virtual balances. When there is a strong correlation for a token pair, an amplification factor is applied to various pools that:

• vastly increases the amount of liquidity available

• amplifies yields for out-of-range liquidity providers

Thus ensuring traders can enjoy low slippage swaps and LPs outside the range can enjoy fantastic yields.

So we have dynamic fees, amplification factors, and virtual balances. Any sane DEX would have said, ok that’s good enough. Not KyberSwap. They didn’t stop there. They went on to launch KyberSwap elastic which features:

• concentrated liquidity

• customisable fee tiers

• reinvestment curves

• amongst many other features

If you are familiar with Uniswap V3, concentrated liquidity helps to provide much more liquidity in user-defined price ranges, providing traders with better trade execution and improved returns for liquidity providers. With all those excess fees generated, KyberSwap has built a reinvestment curve that automatically helps users reinvest fees into a constant product curve.

To tackle the challenges of having a one size fit all liquidity mining mechanism, KyberSwap designed a tick based farming mechanism. This would evaluate and distribute farming rewards based on various factors such as:

• active time of liquidity

• supported trade volume

• liquidity contributed to operator-specified farm ranges.

KyberSwap Elastic also has an anti-abuse feature built in to protect against front-runners sniping just-in-time liquidity. In addition, KyberSwap has also implemented in protocol geometric mean TWAPs that anyone can use. Mind you, it took Uniswap and Chainlink forever to develop this, but Kyberswap has had it operational for a while.

Driving The Wheel Through Adoption

Since KyberSwap elastic went live, the protocol has gained meaningful adoption. Looking at the TVL growth, starting from $0 in late May, the protocol accumulated over $45M in liquidity with no signs of slowing down. (See below)

Similarly, the trading volume is growing steadily week on week. Don’t worry about that peak you see in the chart below, that was simply a result of the large liquidations that occurred in late August. Wouldn’t want to see $1B in crypto getting liquidated every single date, that wouldn’t be great for my mental health (or yours).

Any successful and stable business will want to see their sources of revenue diversified. For crypto protocols, that means revenue generation from multiple chains or multiple products.

So how stable are KyberSwap’s revenue streams? Looking at the chart below, which shows daily swaps on KyberSwap by network, we can see KyberSwap has this locked down with its user base and activity diversified across multiple chains.

The Robots Are Here

The growth and implementation of AI is undeniable. Yes, AI has a place in crypto, and any business ignoring this integration will be left behind.

As a crypto degen, there’s a million things you need to do in order to make money. That includes:

1. Find ideas and opportunities

2. Due diligence

3. Technical analysis

4. Entries and exits

5. Emotional management (because let’s face it, slinging memecoins is tiring and can make you depressed).

KyberAI makes life easy for degens. KyberAI uses machine learning algorithms and various onchain and offchain indicators to provide one single metric that users can quickly evaluate. Similar to crypto’s fear and greed index, a score of 100 indicates a token will increase in price within the next 24 hours, and vice versa.

To say this is crazy tech is not doing it enough justice. KyberAI aggregates billions of data points in order to generate the KyberScore. A few of the onchain data points include:

• number of trades

• trading volume

• net flow to whale wallets and CEXs

• number of holders, and top holders
  

• KyberAI also integrates offchain technical indicators such as:

• live charts

• support and resistance levels

• funding rates

• liquidations on CEXs
  

It’s fair to say safe that KyberAI is one of the best crypto AI tools out there. Given that it supports more than 4,000 tokens across 7 different chains, the breadth of alpha it encompasses is truly unrivalled.

Breaking The Trend Of Lazy Devs

All of that wasn’t enough for you? Oh don’t worry, I got more.

Cross-chain swaps

Using Squid, a liquidity routing protocol built on Axelar network, KyberSwap can offer seamless cross-chain swaps in one click. Read that again. Now you never have to find the right tokens, bridge and swap on the native chain. Saving you both time and money. It will be no different from swapping your tokens right now! In addition, you can bridge your assets across different networks or even use fiat to purchase some crypto directly on Kyberswap.

Limit orders

Normal market orders on a DEX aren’t good enough for you? KyberSwap has created limit orders that are automatically settled onchain, so you no longer have to watch onchain liquidity pools like a hawk. Even better, limit orders automatically have access to the aggregator liquidity, guaranteeing you the best trade execution possible. That means better sniped entries which means more profit at exit.

Kyber Widget

Not a user but a developer instead? KyberSwap also has something for you. The KyberSwap widget allows any developer to integrate a custom front-end for KyberSwap into their own application. This means that any DeFi protocol can easily provide liquidity and aggregator as a service, in conjunction with any other product or service that they provide.

Kyber’s vision is a one stop shop for any defi user.

Finding That Edge In A Crowded Space

The days of being a simple DeFi protocol are gone. To thrive in the future, protocols have to be a one size fit all solution. In KyberSwap’s case, they are a vertically integrated DEX aggregator + liquidity provision platform. Not stopping there, KyberAI, cross-chain swaps, and Kyber widget are all extensions of the business model that lets users/traders/LPs and even developers build on top of Kyber.

Given KyberSwap’s granular and quite frankly superior liquidity provision mechanisms plus a strong focus on a seamless user experience, Kyber could cement itself as the liquidity hub across up and coming chains. It has recently launched on Polygon zkEVM, zkSync Era, and Linea, all of which do not have existing dominant DEXs yet. Large DEXs have to go through cumbersome governance processes to deploy on a new chain, while other DEXs don’t have the brand name to gain widespread adoption from day one. 

Building the liquidity backbone for DeFi with trust and speed.

That’s Kyber’s edge.

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