Kyberbased

Kyberbased is a descriptor used for applications, protocols, or tokens that rely on the Kyber Network’s on-chain liquidity protocol to enable token swaps and liquidity provision directly on the blockchain. Projects described as Kyberbased typically access liquidity through Kyber’s reserves, allowing trades to be executed without an external order book and with rates determined by on-chain reserves and built-in fees.

Operationally, a Kyberbased service routes a user’s trade to one or more reserves within the Kyber network. The protocol computes an exchange rate from available liquidity, executes the trade atomically on-chain, and settles the transaction in a single step. Liquidity providers fund reserves and earn fees from trades. The Kyber Network Crystal (KNC) token is commonly used for protocol governance and, in some deployments, as part of the fee and incentive structure through Kyber governance mechanisms.

Applications and use cases for Kyberbased liquidity include decentralized exchanges and wallets that require reliable on-chain token swaps with broad token coverage. Kyber-based liquidity can be particularly advantageous for trading tokens that may have limited depth on other automated market makers, as reserves from multiple providers can be tapped to fulfill trades.

Benefits of Kyberbased integrations include non-custodial trading, immediate on-chain settlement, and the ability to aggregate liquidity from multiple reserves. Limitations can involve higher gas costs on networks like Ethereum, dependence on the health and diversity of Kyber reserves, and potential price impact for illiquid tokens.

Historically, Kyber Network launched as an on-chain liquidity protocol and has evolved with features such as reserve-based liquidity and dynamic market making, shaping how Kyberbased projects source and route liquidity.