What’s Fueling the Kyber Network and Synthetix Surge?

As people search for higher yields and extended speculation capabilities, platforms like Kyber Network and Synthetix are gaining momentum. In less than a month, KNC and SNX more than doubled in price, going from $0.7 and $0.8 to $1.7 and $2.4, respectively.

Source: CoinGecko

The frequency of updates coming from these networks showcases that they are determined to capitalize on the ongoing trend. If you couldn’t keep up with all the tweets and blog posts, don’t worry. Here’s what’s been going on.

Kyber Network Liquidity

Kyber Network continues to suck liquidity from various corners of the blockchain space. 

During the past few weeks, the project onboarded Quant Network (QNT), Compound (COMP), Binance USD (BUSD), BiLira (TRYB), Pillar (PLR), 2Key (2KEY), and Global Human Trust (GHT).

Among the new additions, COMP, BUSD, and TRYB have stood out. 

Compound has dominated the headlines as of late, and some of its attention may translate to Kyber Network. BUSD affiliates the project with Binance and adds another stablecoin option to its liquidity pool amid a flight to safety across the market. 

Finally, TRYB is backed 1:1 by the Turkish Lira, exposing Kyber Network to the Turkish market and its volatile national currency.

Listings

The team has been pushing KNC tokens on several exchanges. Spot listings include Binance, Smart Valor, and Bitcoin Suisse Online; derivatives appeared on FTX, Binance, and MXC.

New money is entering the market as DeFi continues to expand. With fiat on-ramps on exchanges and direct access to KNC, users can quickly get access to numerous dApps. 

At the same time, margin trading will increase the demand for KNC because of margin maintenance and liquidations. 

Ecosystem Development

Kyber Network’s ecosystem has been exploding. In roughly a month, the team secured investment and partnered with some of the top industry players.

ParaFi Capital, a blockchain-focused investment firm, made a strategic purchase of KNC tokens. The firm will assist the DeFi project by onboarding new clients and improving professional market making.

The project’s latest partnerships look pretty impressive. The list includes Chainlink, Chicago DeFi Alliance (TD Ameritrade is one of the members), Digifox wallet (promoted by DataDash YouTube channel with more than 340,000 subscribers), Origin Protocol and others.

An important DeFi integration was also made with MakerDAO. KNC can now be used as collateral for issuing DAI.

On-Chain Activity

Kyber Network is the top exchange by volume on DappRadar. The team reports an uptrend in the growth of the volume and unique addresses.

Source: Kyber Network’s Blog

The project reached a significant milestone of $1 billion in total volume traded since its inception. Importantly, the YoY traded volume is trending up and accelerating from $70 million during the first year to over $600 million during 2020.

Five million KNC (roughly 2.4% of the total supply) were recently burned), improving Kyber’s supply and demand ratio.

Upcoming Developments

Despite the impressive progress, Kyber has not shown any signs of slowing down. On July 7, Kyber Network will see a Katalyst upgrade that will bring on-chain governance, staking, delegation, and structural improvements.

When Katalyst hits the mainnet, users will be able to either vote directly or delegate tokens to stake pools led either by companies like Stake Capital or community members. KNC used for voting is burned, and in return, voters receive ETH as a reward. 

This setup creates an uncommon deflationary staking model for the Kyber Network.

The KyberDAO will facilitate on-chain governance, similar to many other Ethereum-based projects. 

An interesting partnership with xToken is set to help less involved users get their hands on staking through xKNC. xKNC automatically makes specific voting decisions, making it easier for users to onboard and enjoy yields. 

A similar mechanism will soon be available for Synthetix, too.

Synthetix Liquidity

Synthetix has been focusing on mainstream assets: commodities, equities, and Bitcoin. Also, it started to provide liquidity to Balancer, an interesting platform recently covered in CryptoBriefing’s “Project Spotlight” series.

The most interesting development by Synthetix in partnership with Curve and Ren is BTC Yield Farming Pool. 

The pool has been created to draw BTC to Curve. Users who do so are eligible to get returns in SNX, REN, CRV, and BAL. The more BTC locked on Synthetix, the higher liquidity there is, and the more attractive it becomes for traders.

The team also added Synths for the British FTSE and Japanese NIKKEI indices along with gold. At the beginning of July, the team plans to start tracking the WTI index with the sOIL Synth. 

Synths create a unique brew of crypto, stocks, FX, and commodities that opens traders up to exotic trading strategies available on a single platform.

Tech

The project became a testing ground for Ethereum’s Optimistic Virtual Machine (OVM). OVM is a Layer 2 solution that substantially increases code execution speed, giving it an advantage over most decentralized exchanges (DEXes). 

During a two-week competition, over 1,000 traders attended the Synthetix test platform, making more than 12,000 trades and creating $600 million in volume. 

The test showcased that decentralized exchanges on Ethereum may soon have performance close to their centralized counterparts. The team reported subsecond confirmation times and oracle updates as well as reduced gas costs.

Synthetix also fixed issues with oracle updates and frontrunning on the main platform. This opened up opportunities to offer leveraged trading. The team recently added binary options and plans to start offering futures in a couple of months.

We've written a detailed explanation of how binary options work, so make sure to read it carefully out before you jump in! 2/3 https://t.co/hKUXvduxa7

— Synthetix ⚔️ (@synthetix_io) June 30, 2020

Finally, the team implemented differential fees to make trading equities more attractive. Traditional platforms like Robinhood don’t charge trading fees, so Synthetix lowered them to a few basis points.

Ecosystem Development

SNX is now available on BitGo—a crypto custodian also serving Zcash and Nexo. This brings extra credibility and security to the project. Moreover, BitGo recently launched an institutional trading service, which may benefit Synthetix if institutional clients deem the platform useful.

Also, Synthetix was featured by StudyDeFi—a platform focused on DeFi development. It makes creating dApps easier by providing all the necessary data and instructions.

Upcoming Developments

The project plans to continue expanding its product range and move towards more decentralization. Synthetix futures are set to appear on the exchange in a few months. The initial leverage is expected to be 10 to 20x.

The team aims to deprecate its centralized oracle and swap it for one from Chainlink during phase two of the migration. This will substantially increase the platform’s decentralization and resilience.

Closing Thoughts

Kyber Network and Synthetix are making strides in capitalizing on the DeFi craze. What’s more, the updates are meaningful improvements rather than just hot air.

DeFi evolves fast and becomes more complex, which may be overwhelming even for seasoned crypto traders. Still, it is vital to keep up with projects’ progress to understand where they are headed and whether the sector is growing organically.