Kyber Network, a leading liquidity provider in the decentralised finance (DeFi) arena, have announced plans to introduce a major upgrade to the protocol and the associated Kyber Network Crystal (KNC) token model. Known as Katalyst, the upgrade is scheduled for Q2 of 2020 and is a response to the growing needs of a rapidly evolving decentralised ecosystem.
We’re thrilled to announce our major protocol upgrade Katalyst which will align stakeholder incentives & better serve the liquidity needs for the ecosystem. Katalyst fulfils 3 goals: drive Kyber adoption, create value for KNC, & improve liquidity for DeFi!https://t.co/8dox9Uvj7Z
— Kyber Network (@KyberNetwork) December 17, 2019
Katalyst is designed to support 3 key groups of Kyber network participants – the reserve providers who supply liquidity to Kyber, decentralised applications (DApps) who connect takers to the Kyber protocol, and KNC token holders.
High Volumes and Reliability
For the market makers who are providing liquidity to the network, Katalyst will introduce rebates for high-performing reserve managers who are already benefitting from their level of exposure to the widest range of developers and DApps in the DeFi ecosystem.
The DApp developers will be able to access the best rates across all liquidity providers and allow DApps integrated with Kyber to add a custom spread for flexible rates. It is suggested that this will enable Kyber to become the single on-chain endpoint for DApp integrations and their liquidity needs.
With Katalyst, holders of the KNC token will be able to take part in a new staking mechanism and participate in governance through the launch of the KyberDAO. The decentralised autonomous organisation (DAO) will allow holders to stake their KNC in order to vote on aspects of the protocol – such as rebates for reserves, network fee allocation towards staking rewards, burning KNC – and in return receive a percentage of network fees collected from trading across the network.
If holders prefer to steer clear of voting themselves they will still be able to earn rewards by delegating their tokens and voting power to staking platforms. Kyber report that a number of platforms, including Trust Wallet, imToken, RockX Miner, and Hyperblocks, have expressed support for KNC staking and existing investors such as Hashed and Signum Capital will also form part of the governance structure.
Speaking on the Katalyst upgrade, Hashed CEO Simon Seojoon Kim said, “Kyber Network has proven its utility as the most reliable liquidity pool for all the participants in the DeFi ecosystem on Ethereum. I believe Kyber will be able to grow more explosively with the introduction of an advanced token model and DAO that provide more incentives for its contributors.”
The upgrade announcement comes just one month after Kyber recorded some important milestones including their 500,000th trade involving more than $400 million total volume on the network and hit an all time daily high volume of $7.33 million.