Powering Seamless Inter-Token Transactions with Kyber Network

Asia Blockchain Review
October 23, 2019

Asia Blockchain Review recently spoke to Loi Luu, CEO and Co-founder of Kyber Network, an on-chain liquidity protocol that powers decentralized applications, from exchanges and funds to lending protocols and payments wallets. Luu talked about his research on cryptocurrencies and smart contract security, enhancing the scalability and usability of public cryptocurrencies, and his vision for the future of cross-chain tech. 

Asia Blockchain Review: Can you tell us the idea behind the establishment of Kyber Network?

Loi Luu: While completing my Ph.D. at NUS (National University of Singapore) in Computer Science, I became particularly interested in the topic of Blockchain and Cryptocurrencies. Along with my early academic collaborators, some of whom ultimately became my Kyber Network co-founders, we were impressed by how fundamentally different and game-changing blockchain technology and cryptocurrencies were. In particular, the ability to run an entire global technological and economic system without relying on any centralized party felt like an entirely new world. This eventually motivated me to enter the crypto industry.

My co-founders and I were initially motivated to improve the 3 foundational pillars of the blockchain world, namely decentralization, scalability, and security. In terms of decentralization, our work on Smartpool was focused on preventing over-centralization of mining pools, which made the underlying blockchain networks more secure and censorship-resistant. In scalability, our work on Elastico was the first proposed sharding solution for public blockchains and directly inspired the design of Zilliqa, currently one of the most promising scalable blockchain projects. For security, we built Oyente, which was the first automated smart contract verification framework and one of the most used open-source auditing tools by security experts today (e.g. Melonport, Quantstamp). 

Over time, we wanted to work on a platform that would allow us to bring the benefits of decentralized technologies to a much bigger audience and facilitate many other real-world use cases. The key moment happened for us when a project approached us to discuss if it is possible to accept a different token in addition to Ethereum, with the intention to have common token-holders and community with another token ecosystem.

It turned out that no existing solution at the time addressed the problem in a practical way. The more we worked on the problem, the more we realized the potential impact of solving it. Besides removing key hurdles that hinder the adoption of decentralized technologies, it would give equal access to services and platforms to token holders regardless of which token they hold.

Since then, we sought to facilitate seamless decentralized token exchange between different projects and ecosystems. That, we thought, might eventually lead to equalizing access to everyone, regardless of origin, location, power, or background.

ABR: Can you tell us about Kyber Network’s protocol?

LL: Kyber’s on-chain liquidity protocol enables decentralized token swaps to be integrated into any application. For example, our in-house token swap service KyberSwap.com allows end users to seamlessly convert ETH and over 70 ERC20 tokens (including DAI, BAT, and MKR) in a fast, simple, and secure way. Kyber’s protocol also aggregates liquidity from a wide range of sources known as token reserves to provide the best available rate for users in these applications.

Using Kyber’s protocol, developers can build innovative payment flows and applications, including instant token swap services, ERC20 payments, and financial DApps  —  helping to build a world where any token is usable anywhere.

To date, there are more than 55 blockchain projects that have integrated Kyber for their liquidity needs, including popular wallets MyEtherWallet (MEW), imToken, Trust, Enjin, and HTC Exodus’s Zion Vault, as well as decentralized finance (DeFi) projects such as InstaDApp, Nuo, Set, Fulcrum, and Melonport.


ABR: How is Kyber Network different from other similar platforms?

LL: The focus for these other platforms is to facilitate traditional orderbook-based trading, which is great for professional traders and certainly a solid category that many solutions are focused on as well.

For Kyber, we are 100% focused on powering decentralized liquidity and value exchange for the whole ecosystem. We enable a much larger set of use cases for any token that users contribute to the protocol. For example, vendors are able to accept payments in multiple tokens on their e-commerce platforms yet receiving in their preferred token. In addition, decentralized financial projects (e.g. index funds and lending protocols) have the means to rebalance their portfolio instantly.

For all these use cases, users/projects want to move forward instantly with low fees and, even more importantly, with minimal transaction uncertainty. Kyber’s design uniquely facilitate these properties. Furthermore, Kyber runs everything on-chain to make it extremely easy for other smart contracts and on-chain applications to integrate with Kyber and leverage our liquidity pool. For every application that integrates with Kyber, it introduces more use cases for tokens that are available on Kyber as well.

Last but not least, we think it’s extremely important for this space to focus on shipping solid technology and working hard together with other projects in the space to create a more useful and connected tokenized world.

ABR: What are the goals for the future of Kyber?

LL: Our mission is to make any token both tradable and usable anywhere and become the transaction layer for the decentralized economy.

Here are our Long-Term Objectives:

  • Expanding the scope of Kyber, by moving towards a permissionless liquidity protocol that can be implemented on any smart contract-enabled blockchain. We are already experimenting on EOS, as seen from Waterloo Bridge and Yoloswap.com. There is also an independent project building a DEX called TomoSwap on TomoChain based on the Kyber protocol. Through these initiatives, we are widening Kyber adoption across blockchains.
  • Supporting the growth of the decentralized economy in 5 key areas: end-user swaps, NFT and commerce payments, exchanges and trading, decentralized finance, and liquidity provision. We also work with ecosystem partners on community-led initiatives such as WBTC (Wrapped Bitcoin), which help to bring Bitcoin liquidity to Ethereum.
  • Establishing the technical, communication and governance framework to grow a community with the passion, expertise, and incentive to build Kyber together. We are expecting protocol direction, implementation, and treasury decisions to eventually be made by the community via proposals and votes on the KyberDAO.


ABR: What’s your opinion on the regulatory landscape today?

LL: We are starting to see more countries take a positive approach towards cutting-edge technology such as blockchain and cryptocurrencies.

For instance, 2018’s Vietnam Crypto Dialogue, which Kyber co-organized with Regulus, Midas Protocol, Tomochain, Kambria and Huobi Global, focused on decentralized technologies and potential regulation in the country. This was the first time that the Vietnamese government provided an official platform to actively engage blockchain projects in open discussion, and the event was heavily covered by local press and media.

The Singapore government in general has also been very forward-looking with regards to new technologies, and has started an initiative to make Singapore a ‘Smart Nation’. The Monetary Authority of Singapore (MAS) has even conducted their own experiments on distributed ledger technology in ‘Project Ubin’, which helped MAS better understand the potential benefits the technology may bring through practical experimentation.

ABR: Vietnam has become more supportive towards blockchain lately. What is your take on this market? 

LL: We see Vietnam becoming more open-minded and taking important steps towards understanding decentralized technologies. Last year, representatives from Vietnam’s Ministry of Justice, Ministry of Finance and the State Bank of Vietnam visited Kyber’s Singapore office to hear our views on the topic. This was followed by the inaugural Vietnam Crypto Dialogue in Hanoi, which was the very first time that the Vietnamese government provided an official platform to actively engage blockchain projects in open discussion. The event was heavily covered by the local press and media. We did a presentation on how to create an efficient and transparent economy using blockchain. Vitalik Buterin and other prominent ecosystem players such as aelf, Zilliqa, Sparrow Exchange, Traceto.io, Signum Capital, Hashed, and imToken also participated in the dialogue to present their views.

Vietnam has a vibrant and talented developer community. Together with TomoChain, Kyber has held 10 successful Ethereum Hanoi meetups last year with an average of 100 developers in attendance each time. It was very encouraging to see their interest and passion for blockchain and cryptocurrencies. We believe Vietnam will be a hub of innovation and progress in the space.


ABR: In your opinion, what is the future for DeFi market?

LL: Decentralized Finance (DeFi) can be seen as the trading and transacting of digital assets using blockchain technology, with the user in full control of his/her funds. I believe that DeFi has a huge potential to disrupt the traditional financial system, since financial intermediaries can now be removed, transactions are less prone to fraud and counterparty risks, and there is also an opportunity for greater financial inclusion. The impact of DeFi will be especially pronounced given the rapid increase in the use of smartphones and how people are getting more comfortable managing their finances online.

I foresee that with DeFi, important wealth-building and business tools such as applications involving loans, insurance, investments, and other financial services, will become much more accessible to people around the world. Anyone with an internet connection and a smartphone or laptop will be able to connect to the public blockchain network, use DeFi platforms, and participate in the global digital economy.

For example, someone without a bank account in a remote region in one country can still receive crypto payment from a client in another country thousands of miles away. This can happen in a matter of minutes, with even lower fees compared to typical remittance rates. Moreover, payment can be made without trusting any financial intermediary, as transactions on the public blockchain are censorship-resistant and verifiable.

At Kyber, we are building a protocol to facilitate the conversion of cryptocurrencies in the most trustless and secure manner. Our long-term goal is to process most of the financial transactions for these applications in the decentralized world.

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