KyberSwap

Market Making

KyberSwap is a multichain decentralized exchange aggregator as well as its own novel liquidity source.

Risk Rating
Watch Out
Protocol Code Quality
Protocol Maturity
Protocol Design
Summary
What we like
KyberSwap is a multichain decentralized exchange aggregator that allows users to conduct trades on any of its 12 supported networks and across 60+ third-party exchanges.
What we like less
The protocol is relatively less used versus larger competitors despite being around since 2017. There is also limited audits and information on its multisig setup.
What it means for you
Offers you a great way to earn trading fees via its AMM design that dynamically adjusts trading fees based on market conditions. With its in-house concentrated liquidity AMM, users can earn greater fees and auto-compound yield.
Information
Exploit/Hacks
One
Info
  • Website
  • Token: KNC
  • Tags: Market Making
Key Metrics
  • TVL: $3.6M (Rank #175)
  • TVL Ranking by Market Making: #0
  • Blockchain: Ethereum, Polygon, Avalanche, Binance, Optimism, Bittorrent, zkSync Era, Scroll, Linea, Arbitrum, Fantom, Cronos, Oasis, Velas, Aurora
  • Chain TVL
    • Ethereum: $2.39M
    • Polygon: $805.39K
    • Avalanche: $153.78K
    • Binance: $97.83K
    • Optimism: $57.04K
    • Others: $108.61K
Risk Assessment
Watch Out
Protocol Code Quality
  • Code reviewed by at least one experienced auditor; ChainSecurity audited in December 2021
  • Public team promotes accountability
  • One unmitigated protocol hack since launch
Protocol Maturity
  • Core protocol launched in 2021; maturity over one year minimizes technical risk as smart contracts are well battle-tested
  • Top 5% by total value locked reduces risk
  • Multisig wallet controls protocol upgrades
  • Multisig consists of less than 4 signers, which makes the protocol more susceptible to centralization risks
  • Timelock is at least 48hrs, which provides users with sufficient time to exit if any malicious upgrades are approved
  • Moderate voting power concentration
Protocol Design
  • No death spiral concerns
  • This protocol is susceptible to risks related to decentralized exchanges (DEXs), such as impermanent loss
Things to know about KyberSwap

How KyberSwap works

KyberSwap is a decentralized exchange that allows users to swap and earn crypto assets. The protocol is split into two components: Classic and Elastic. KyberSwap Classic's Dynamic Market Maker (DMM) is a modified version of the traditional AMM model widely used. Instead of a flat fee for each pool, the DMM dynamically adjusts LP fees based on prevailing market conditions. When the market is highly volatile, fees will increase to better reflect greater risks. When the market is stable, fees decrease as volatility drops. The DMM automatically recalculates fees by analyzing on-chain volume data for each liquidity pool. The second feature of the DMM is a programmable price curve called Amplification (AMP). The AMP allows a liquidity pool to mimic higher levels of liquidity without needing more tokens. LPs set their own AMP based on the token pair type. Pairs with greater correlation like stablecoins have higher AMP, while more volatile pairs will have lower AMP. The second feature, KyberSwap Elastic, is a tick-based AMM with concentrated liquidity, similar to Uniswap V3. Like Uniswap, users add liquidity to a specific price range and receive an NFT in return that represents their share of the pool. The difference with KyberSwap Elastic is that it auto-compounds the trading fees using a reinvestment curve. Lastly, there is also a KyberSwap Aggregator that serves to provide the best rates for traders across several third-party DEXs like Uniswap and Curve.

How is KyberSwap unique?

KyberSwap Classic uses its DMM and AMP features to ensure healthy liquidity. KyberWap Elastic leverages concentrated liquidity, can auto-compound fees, offers multiple fee tiers, and Just In Time (JIT) protection to help LPs maximize their yield.

What are the protocol fees?

KyberSwap Classic leverages a dynamic fee on each liquidity pool that self-adjusts based on market conditions. KyberSwap Elastic has five different fee tiers including 0.08%, 0.01%, 0.04%, 0.3%, and 1%. LPs can select the fee tier they want taking into account how correlated the token pair is. The protocol does not charge any fees for using the DEX aggreagtor.