Konnichiwa Dear Kyberians!
As we pack our bags for DevCon, Osaka, we reflect on another month that’s gone by in a flash. From new fiat-to-crypto functionality added to KyberSwap, to exciting new DeFi integrations, to ups and downs in volumes, it’s been a busy month at Kyber offices. Without further ado, we present to you Kyber Ecosystem Report #7.
Kyber Network Stats
Crypto markets continued their volatile and generally bearish trend in the last two months (ETH went from a peak of $234 early August to as low as $159 last week of September) and although Kyber Network volumes are below their all time highs in June and July, we did see a 5% increase in ETH volume over August, and a 2% dip in USD volume:
As the end of September marks the close of the Q3 reporting period, it’s worth looking back at our quarterly growth over the year and noting just how much we’ve grown over the last four quarters.
At an integration level, we saw a notable increase in volumes from Fulcrum, Trust Wallet, and various arbitrage bots, while KyberSwap, Nuo Network and Instadapp saw decrease in their volumes:
The fastest growing dapps have mostly been arbitrage bots and wallets, including Argent and Trust Wallet. We’re also pleased to see the growth in our newly launched KyberSwap Android app:
Quick Protocol Parameter Update
We know you all love to talk about smart contract protocol parameters so we’re going to indulge you with an exciting update on the maxGasPrice parameter. maxGasPrice in Kyber Network smart contracts determine the maximum price of gas that can be paid for in any given Kyber trade. Until the 4th of October, this was set to 100gwei and anyone who tried to pay a higher gas price saw their transactions reverted (ie. cancelled). From the 4th of October onwards, the new maxGasPrice has been set to 50gwei.
A maximum gas price parameter exists to stop front runners from looking into the Ethereum mempool at pending Kyber transactions, and putting in their orders at a higher gas price to get ahead of the existing transactions, and therefore disadvantaging existing trades. Lowering the gas price reduces front runners’ abilities to do this. We’ve written a detailed blog post examining this topic here.
Buy Crypto with Fiat on KyberSwap
And it’s happened! You can now use euros, dollars, and other fiat money to buy crypto from within KyberSwap. We’ve integrated CoinDirect, a fiat on-and-off-ramp so that users can use their credit cards to buy ETH before swapping to other ERC20 tokens on KyberSwap.
Since we launched Kyber, we’ve met many of you around the world who really want to buy crypto to use in various dapps, but find it a challenge to convert their local currency to crypto. Many are hesitant to use localbitcoins.com or their local expensive exchanges, and Coindirect & KyberSwap’s integration simplifies everything by reducing the buying process to a few clicks without compromising on security or price.
To learn more about our partnership and how to buy crypto with fiat, check out this post.
KNC hodlers were in for a double treat in September with the introduction of two new services that make it both easier to spend KNC, and easier to custody KNC. We are of course referring to KNC’s addition to Monolith and Gemini Custody.
As part of the Monolith ecosystem, KNC can now be stored on the Contract Wallet, and from there, easily converted into fiat money to be spent throughout the world at retail stores and online using the Tokencard VISA debit card.
Gemini’s Custody service on the other hand, allows KNC to be stored securely on offline multisignature-managed hardware security modules (HSM). These modules are stored across geographically distributed, access-controlled facilities managed by the Gemini Trust Company. You can read more about Gemini’s Qualified Custodian credentials and their rigorous compliance standard work with Deloitte here.
As the DeFi space expands with new products around trading, lending and borrowing, we’re also starting to see the assets held within these products split into a dizzying array of specialized ‘sub-assets’.
Primary example is DAI and the dozens of derivatives built off it to provide various granular services. As of last count, there were over 20 different DAI variations in existence (cDAI, rDAI, iDAI, gDAI, dDAI, yDAI, zkDAI, xDAI, etc, etc) with each performing a niche function, showing us just how programmable programmable money can be.
Our friend Kyle from bZx has written a great primer on all these DAI variations and what they do and how they perform here and we highly recommend reading it. We won’t go into the details, but instead we’d like to highlight three variations of DAI that use Kyber that have sprung up in just this last month alone:
PoolDAI is a donation protocol that allows users to pool their money together and automatically donate the interest to a cause of their choosing. The system “pools DAI, converts it into Compound DAI, and sends the interest to a beneficiary. Users putting DAI into the pool receive Pooled cDAI (pcDAI), an ERC20 token which is 1-for-1 redeemable for DAI at any time.” Kyber integration allows pcDAI to be minted or burnt using any ERC20 or ETH instead of just DAI
Introducing Pool DAI: A no-loss donation protocol enabling people to pool money together, lend it out, and donate the interest to a cause. Powered by @compoundfinance @KyberNetwork @graphprotocol @blocknative @MakerDAO Live on Ethereum Mainnet. https://t.co/RGin7OFPtU
gDAI is a service that allows users to send DAI without having to hold ETH to pay for gas. It combines the Gas Station Network, Fulcrum/Compound, and Kyber to receive interest by lending out user funds, and using that interest to pay for gas costs.
Tribute — Although Kyber integration with Tribute hasn’t gone live just yet, it’s cool enough we wanted to introduce them anyway. Tribute is an abstraction UI layer built on rDAI and Compound that allows users to direct portions of the interest generated from their cryptoassets to pay for metered content, utility bills, or charity contributions.
Want access to a video game or paid streaming service? Point your Tribute interest towards the service so the developer gets paid your interest while you play or consume the content. Switch off the interest when you’re done with the content. We can easily see such a unique payment model adopted at a wider scale.
DAI is money at rest. cDAI is money that gets up and goes to work for you 24/7 to make more money. @Tribute_rDAI is money that hustles across the financial landscape, making money, paying bills, donating to charity – whatever makes your financial life tick https://t.co/261Gl5Qahz
Other New DeFi Integrations
SpiderDex — SpiderDex is a decentralized exchange for blockchain game assets. It brings into one UI digital assets from 48 different Ethereum games including Decentraland, CryptoKitties, and Axie Infinity. Kyber integration allows for a quick swap of ERC20 tokens to ETH to buy these assets.
CoTrader — CoTrader is a simple to use ‘non-custodial crypto investments funds marketplace’ . Users can shop around funds and pick from multiple strategies ranging from higher risk ones to more conservative ones and easily invest in them.
Overall Kyber-DeFi Growth
Our DeFi table has a new leader for the first time in eight months! Fulcrum has been showing strong growth ever since it launched in late May, and with a 91% growth in ETH volume since August, it now takes up the top spot on our DeFi chart, making up 47% of all DeFi traffic passing through Kyber Network.
Reserve Manager and Token Metrics
With the expansion of the DeFi ecosystem leading to increasing liquidity needs, and DEX aggregators sourcing liquidity only from the best priced DEXs, liquidity providers are in strong competition between themselves to lower their spreads and improve their prices.
At Kyber we’ve continuously focused on providing the best possible price and we do this by both improving efficiencies at a protocol level (our pipeline always contains technical smart contract updates), and improving the Kyber Reserve Manager’s performance.
September saw the Kyber Reserve Manager focus on improving the USDC/ETH pair, and scaled up its liquidity to a level where it can comfortably service single trades as large as $20k.
Did you know? We recently improved $USDC liquidity in Kyber’s own reserve, and it now offers one of the best rates around! We expect the same for @MakerDAO $DAI soon 😉 Use / integrate Kyber now for better rates! @ResearchCircle @circlepay #Ethereum
This month also saw BTU Protocol and Monolith join Kyber Network as Automated Price Reserve Managers to provide liquidity for the BTU and TKN tokens respectively.
Reserve Manager Metrics
Apart from the Kyber Reserve Manager with 56% growth, and the SNX reserve with another %196 growth, most other reserves saw a drop in their volumes in line with the general drop in activity in crypto trading markets.
Reserve Manager Insights
Reserve managers usually focus on providing liquidity for a single ERC20, and this will most often be the ERC20 tied to that reserve manager (ie. the Synthetix Automated Price Reserve only manages the SNX/ETH pair, the REN Protocol APR provides liquidity for the REN/ETH pair).
Apart from these reserves, there are four reserves that play a wider role by providing liquidity to multiple pairs and most often, they service the ‘blue chip’ tokens within the Ethereum ecosystem: DAI, MKR, USDC, USDT, and WBTC
With the above managers all providing liquidity for DAI, it is worth comparing their performance since their individual share of the DAI volume equates to the percent of times they’ve been the most competitive out of all reserves within Kyber Network, ie. if the Kyber Reserve supplied 40.8% of the DAI volume, it had the best DAI price amongst all reserves 40.8% of the time (please note, the protocol adds a 0.25% fee, therefore prices at source for these dex bridges would be 0.25% lower)
Our Virtual DeFi Hackathon is now in full swing having started on the 9th of September, and we’re already excited to see dozens of submissions even though the hackathon carries on until the 19th of October. We can’t wait to unveil what you’ve all built.
We’ve also released a Spotlight Series of blog posts to highlight our hackathon partners’ technologies and provide you with ideas and inspiration on what you could hack during the hackathon. You can check out the series in the following blog posts: bZx, Chainlink, Compound, Melon, Synthetix, WBTC, and don’t forget, $42,000 is up for grabs!
September saw us travel to Boston to participate at Ethglobal’s EthBoston hackathon, hop over to the London DeFi Summit to give a talk about the growth of the DeFi space, and attend Tel Aviv Blockchain Week to join a panel on what’s scaling in DeFi right now.
We were also at the Connected Smart Contracts event during Seoul Blockchain Week and the Coindesk Consensus 2019 Invest:Asia Summit in Singapore to share what we’ve been up to and how both the Kyber and Ethereum ecosystems have been growing.
Of course, the main event of October will be Devcon V where thousands of Ethereum developers, teams, and community members will descend to Osaka, Japan between the 7th and 12th of October to talk about all things Ethereum.
We’re really looking forward to exchanging ideas on ETH2.0, DeFi, governance, privacy, Eth1.x, and brainstorming ideas on how to tackle existing challenges in our space while taking stock of where we’re heading.
As part of Devcon, we’ll be attending the dozens of satellite events happening around the conference (full list here). A few we’d like to highlight where me, Loi, and other team members will be talking about Kyber, DeFi, and other Ethereum related topics will be the following:
- Dapper Labs & Friends: Web3 Business Models, 7th October— We’ll be on a panel with Uniswap and OpenSea to discuss sustainable Web 3 business models. Info
- DEXs on Ethereum, 7th October— We will be co-hosting a DEX meetup with Uniswap, Loopring, and Gnosis. Info
- Breakthroughs in the ETH Ecosystem, 8th October — This event will revolve around new trends in the Ethereum ecosystem. Info
- Beyond Consensus — Crypto in Asia, 9th October — We’ll be deep diving into the Asian crypto markets together with Celer, Nervos, Matic and band. Info
- Rebuilding Finance: How to Overcome the First Hurdles of Mass Adoption, 10th October— We will be on a panel with MakerDAO, ShapeShift, and Aave to discuss the mass adoption of DeFi. Info
We’d love to meet you if you’re going to be in Osaka between the 7th and 12th of October so feel free to reach out to us on telegram to arrange.
As always, thank you for your great interest in these monthly updates. We always enjoy reflecting back on a month’s work to see not only how much progress we’ve made, but how much progress the Ethereum space has made as a whole. From our DeFi partners to Eth2.0 client teams, to wallets, to DAOs, everyone is busy building their respective parts of this decentralized revolution, and we feel blessed to be part of this amazing journey.