Kyber Network Based on Ethereum Blockchain: How it Works
Kyber Network is a decentralized liquidity protocol. This is basically bridging the liquidity of the Ethereum network. This is operated on the Ethereum blockchain and Launched in 2017. Kyber Network's primary goal is to facilitate the seamless exchange of cryptos and tokens in a trustless and efficient manner. Let's know about this network in this post.
How Kyber Network Works:
Kyber Network acts as an intermediary layer between users and various liquidity sources. So in this system tokens can be directly traded between the wallets without the need for centralised exchange. This is achieved with the help of smart contracts of the Ethereum blockchain network. The following four functions can be achieved here with the help of a blockchain network for this purpose by using the smart contract.
1. Token Swap: The primary function of Kyber Network is to allow users to swap one crypto or token for another. Users send their tokens to a Kyber Network smart contract, and the contract finds the best available exchange rate from various liquidity sources. The swap is executed on-chain. As the chain is used to the Ethereum blockchain it is transparent and secure enough.
2. Liquidity Pools: Kyber Network aggregates liquidity from a wide range of sources. This liquidity pool is collected from individual locality for the chain and supports many of the trading pairs.
3. Reserve Managers: To ensure continuous liquidity and competitive rates, Kyber Network allows reserve managers to participate in the system. These managers operate as liquidity providers and maintain their reserves of tokens.
4. Integration with dApps: Kyber Network provides developers with an easy-to-use API and smart contract integration. Decentralized applications (dApps) are able to access liquidity and facilitate token swaps within their platforms. This integration is crucial for expanding the adoption of Kyber's liquidity services across the Ethereum ecosystem.
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VEIGO (Community Mod)
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