After it’s succesful ICO in 2017, many were excited about the launch of the decentralized exchange Kyber Network, however, it remained unclear if and when the platform would go live. That doubt has been erased with the official launch taking place on Monday night, and the Kyber Network is now open to the public.
What this exchange brings to the table is a decentralized trading platform capable of supporting any cryptocurrency or digital asset. While the platform is currently still in public beta, it is evident the “full” launch of this platform is now very close. There is no official date for the full launch as it will depend on the performance during this beta phase and subsequent modifications required.
Although there are a few decentralized exchanges on the market already, more competition can only be positive. Competing decentralized protocols will offer traders a lot more opportunities to trade the currencies they are passionate about and even discover completely new trading pairs.
There is a growing need for decentralized exchanges. First, many cryptocurrency exchanges suffer from hacks and phishing attempts and these can be minimized by moving to a decentralized solution. Secondly, growing constraints from government regulation means that centralized exchanges will have either move to more favourable jurisdictions, or change the way they do business, and limit the number of tokens they have available for trading.
Solving the Liquidity Problem
A concern for decentralized exchanges is that there may not be enough liquidity. Kyber Network aims to solve this problem by providing high liquidity to enable instant transactions without compromising security. They claim to be able to do this by using reserve managers, who are incentivized by the network to monetize their assets. It will be very interesting to see how well this approach works in the future.
The way this works is that these reserve managers can earn profit from the spread determined on the platform. As the Kyber Network becomes more popular and processes more trades, it is evident there will be more earnings for reserve managers in the future. It is in their best interest to promote the use of this decentralized exchange to improve its overall liquidity and demand.
It is evident cryptocurrency continues to evolve as an industry. While there is still a need for centralized trading platforms right now, the transition to decentralized solutions is already underway. We can only hope to see more of these platforms come to market soon and genuinely pose a threat to centralized exchanges. When it comes to user funds, a decentralized solution is, by default, far more secure.