This is the first post in our “After the ICO” series. We talk to crypto projects that have completed their ICO and are now 100% focused on delivering value for users and token hodlers. First out is Kyber Network – a decentralized exchange for cryptocurrencies – and the first ICO we featured, back in fall 2017. Read on to learn more about Kyber Network, and get a rare peek into what life is like on the inside of an ICO-funded startup.
The Kyber Network ICO
Kyber Network completed their ICO on September 16th, successfully raising 200,000 ETH (approx $60M USD at the time). Their Slack group had an incredible growth, and they ended up closing their whitelist at about 50,000 entries. Notably, Kyber Network was the last ICO that Ethereum founder Vitalik Buterin advised, which added to the massive attention Kyber Network received.
Many (including us!) have described the Kyber Network ICO as an example to follow for other ICOs. They had an individual cap for the first 24 hours, allowing everyone on the whitelists to participate in an egalitarian manner. When the individual cap was lifted on day 2 of the sale, the KNC tokens were sold out in a matter of minutes.
About a week after the ICO had completed, the KNC token hit exchanges, and the token price went almost 5x within the first 24 hours, from ~$0.55 to a local maximum of ~$2.5. At the time of writing this article, KNC is trading at ~$2.8.
From ICO to BUIDL
But what is Kyber Network actually building? In brief, Kyber Network is a decentralized exchange which allows conversion of digital assets – specifically tokens and cryptocurrencies. They provide an exchange interface, payment APIs and smart contracts that allow anyone to seamlessly receive payments from any token.
At the time of writing, Kyber Network supports trading between 22 different cryptoassets: ETH, KNC, RCN, APPC, EOS, SNT, ELF, POWR, MANA, BAT, REQ, DAI, RDN, LINK, ENG, SALT, BQX, ADX, AST, OMG, ZIL, GTO.
Now, to what extent are people actually using Kyber Network to exchange cryptoassets? The Kyber Network Tracker shows the volume that goes through Kyber’s exchange. As you can see, Kyber Network very recently hit an important milestone: $1M USD volume per day. One important driver for transaction volume is their recent partnership with MyEtherWallet. This is not just a partnership on paper – you can literally make token swaps on MyEtherWallet using Kyber Network today.
Why is network volume important for the KNC token?
Essentially, transaction fees on the exchange are collected in KNC, which means demand for KNC increases as transaction volume increases. Furthermore, a proportion of the KNC fees are burnt – effectively reducing the circulating supply of KNC. All other factors being equal, a reduction in supply plus an increase in demand should imply an appreciation in the KNC price. Hence, the graph above will be very important to KNC hodlers.
Although the Kyber Network transaction volume is increasing, it’s still only a fraction of some other decentralized exchanges. The equivalent tracker for 0x (an exchange protocol that other DEXes can build on top of) shows that Kyber Network still has a large upside:
It will be very exciting to follow the adoption of Kyber Network in the weeks and months to come.
Interview with Kyber Network CEO Loi Luu
We often read about ICOs and the projects that are transforming the financial world, but what is life like on the inside? We talked to CEO Loi Luu, to get his perspective on the progress of Kyber Network and the way ahead.
What does a normal day at work look like for Loi Luu these days?
I’m really happy to say I don’t have a typical day, and for now I’m not looking for one.
Of course I have plenty of daily work obligations. In the mornings I tend to reply to emails and meet with the Kyber teams, focussing on the internal progress of the company. In the afternoons I turn my attention to external meetings, interviews, and calls.
Obviously there are exceptions to this schedule. I oftentimes have calls at night due to the time difference between Singapore and the US/Europe. Additionally, I make a point of attending meetups at least once a month to socialize and catch up with the newest projects in the crypto-space.
What was the biggest challenge for Kyber Network shifting gears from ICO to BUIDL?
As to be expected the post-ICO period for Kyber Network was overall challenging. We had to be really intentional with how we moved forward to ensure that we kept our promises to all parties involved. I would say this pressure and expectation from all our contributors was the biggest challenge. We were really fortunate to receive immense support from a wide range of people, and I knew we had to honor their trust and encouragement.
Fortunately, Kyber Network has seen healthy growth since its ICO and we keep beating the expectation by delivering before the deadline. The pressure to fulfil the expectations of our contributors is, of course, still a prominent part of the way we manage the company.
How do you balance focus on your product vs keeping up with the crypto space?
We have teams that focus on the different aspects of the business. By distributing the work we are able to keep a strong product at the core of the company. Our developers and business teams constantly coordinate to ensure that the platform is on par with the expectations of the public.
As for keeping up with the crypto-space, I spend a lot of time focussing on being up-to-date and informed. I regularly attend conferences, arrange calls with other teams, read about news on public forums, and speak on panels. This keeps me quite engaged with everything that is going on in the crypto-space.
How has the crypto space changed since you completed the ICO?
The most obvious answer would be that it has grown significantly in both size and scale. The ICO space for instance has become much more competitive. There are more new projects than ever before releasing their own tokens. We are also seeing large conglomerates and established companies exploring the potential of blockchain technology. Companies like Kakao Blockchain and Aptoide are using reverse ICOs to tokenize their businesses. This all suggests that blockchain is becoming increasingly mainstream, and we are steadily moving towards widespread adoption.
Unfortunately the growth of the crypto-space has encouraged scammers to develop much more sophisticated methods. While previously scams happened mostly on individual Slack groups, we are now seeing a rise of scam activity on public platforms like Twitter and Reddit.
How hard is it to recruit talent in the blockchain space?
Recruiting talents has always been a big issue for blockchain companies. With so many new projects popping up, there is limited talent to support the existing companies. Everyone seems to be fighting to recruit the few people who know the blockchain scene well. Fortunately, Kyber Network has been able to hire some great people, but we are still tackling this challenge.
How do you think an ICO-funded startup is different from a VC-funded startup?
First of all, ICO funded companies receive money much quicker than those funded by VC. VC funded startups are able to scale more gradually because they tend to raise money only after the company has grown to a certain threshold. ICO funded startups, however, receive a large amount of money before they have created a solid working product or revenue stream, and as a result ICO companies typically face immense public pressure to meet targets.
How do you manage and diversify the funds raised in an ICO?
We strategically divided the funds raised in the Kyber Network ICO between our reserve, our operations. We put half of the funds raised in the ICO towards our reserve. The other half are being used to fund operations costs such as legal and marketing fees, along with the cost of other admins. We cash out enough to sustain our operations for a few years, and keep the rest in ETH.
Where do you see Kyber Network 1 year from now?
I think the coming year will be big for Kyber Network. I see us becoming the default integrated token swap platform used by crypto businesses and platforms. We will definitely expand to new and different geographic regions, increasing our presence in Europe and the US. Finally, I think we will see more and more real world applications of our service, possibly the use of Kyber to support daily crypto-payments.
To stay up to date with Kyber Network, you can visit their website.
Note: No payment was made by this ICO for this article. We always label our sponsored content clearly at the top of the article. This article, nor any of the content found on this website, should be considered investment advice. Always do your own research.