Blockchain Exchanges Via Kyber Network Studied By UC Berkeley

Announcements, Blockchain, Education | November 24, 2017 By:

Singaporean digital asset platform Kyber Network is collaborating with a University of California, Berkeley blockchain group to study ways to enhance the robustness and efficiency of decentralized exchanges.

Kyber Network is a new system which allows the exchange and conversion of digital assets. Using its payment APIs, users can send one token to a recipient who wishes to receive the payment in another token in a single transaction. Users can also mitigate the risks of price fluctuations in the cryptocurrency world with the company’s derivative trading. In September, The company announced that its initial coin offering (ICO) reached its full funding cap of 200,000 ETH, worth about $60 million at an ethereum price level of $300.

Kyber Network and Blockchain at Berkeley will explore topics including trading diversity, trading strategies, and trading sustainability in the context of the Kyber Network model. The research would take approximately 3 months to facilitate, and divided into 4 phases, starting with pre-analysis and problem statement, then designing potential solutions to the observed challenges, followed by developing concrete analysis of the proposed solutions, and lastly delivery of final report.

Kyber Network is hoping that the research partnership would enable them to offer better services to their users, especially after they have pledged to offer their token conversion service to platforms such as WAX and OPSkins, Aptoide, Gifto, and many other platforms with millions of users. The company said the partnership will also give them more confidence to onboard reserve operators from different organizations to improve the liquidity in the platform.

Kyber Network stated that while centralized exchanges use the order book model to eliminate trading risks, decentralized exchanges do not. To prevent this problem reserve contributors should mitigate the following risks including price discovery and front running risk, depletion risk and inventory risk.

In anticipation of these potential challenges, the research will consider four parameters, including time parameter (T), to rebalance the reserve portfolio of all tokens back to a targeted ratio after every T increment in time, cap parameter (C), to mitigate both front running and depletion risk, price parameter (P), to remain competitive with prices on centralized exchanges and lock-up parameter (L) to allow longer lock-up times from reserve contributors that would result in higher share of the profits made from transactions.

“Kyber Network and Blockchain and Berkeley have come together because we have a common commitment to a positive impact on the ecosystem and we see the power of DEX to influence adoption of the technology by mainstream users, said Kyber Network CEO Loi Luu. Berkeley students, energetically focused on innovation and creative problem-solving, are an excellent group to help extend Kyber Network’s ideas and creative energy.”