KyberSwap Axelar Grants Proposal
Project Name KyberSwap by Kyber Network
Basic Description KyberSwap is a multi-chain DEX aggregator and liquidity platform
Date: 03/09/2023
Contact Names
Jade Hoang: Business Development Manager, Kyber Network - Telegram: @jadehoang
Sasha Mai: Head of Business Development, Kyber Network - Telegram: @sashamai
Grant Amount: $111,000 in AXL
Recipient address for AXL (Axelar) incentives:
KyberSwap Ops multisig: 0x2475039bF2ECDCe2EE4C82954e64bE9674f43546
Supported Networks: Ethereum, Polygon, Polygon zkEVM, Arbitrum, Optimism, Linea.
(
Note: This address does not support zkSync; a zkSync address will be provided in the comments upon proposal approval.)
Summary
Kyber Network is requesting $111,000 in AXL incentives over a period of 3 months to bootstrap and deepen liquidity for the following selected pairs and chains on KyberSwap:
Kyber Network will provide $57,000 in KNC incentives and an equivalent value of $54,000 in axlETH seeding.
Additionally, Lido Finance will be matching Axelar and KyberNetwork to provide $10,000 per month for axlwstETH liquidity bootstrapping. They have approved two months of incentives so far.
Project description
Kyber launched on Ethereum in February 2018 and is a pioneer in the DeFi space, having developed one of the earliest decentralized exchange protocols (DEX) with Vitalik Buterin as an advisor. Kyber was the most used DeFi protocol in 2019 and also launched WBTC (Wrapped Bitcoin) - the most popular ERC20 version of Bitcoin.
Today, our flagship product, KyberSwap, is a leading multi-chain DEX aggregator and liquidity platform that aims to provide the best rates for traders, while enabling liquidity providers to get the best returns through capital efficiency and concentrated liquidity. KyberSwap has been deployed on 14 chains including Ethereum, Polygon, Polygon zkEVM, Arbitrum, Optimism, zkSync and Linea; and has facilitated over $20B in trading volume.
Motivation
Axelarâs AXL incentives would be used by KyberSwap to drive liquidity growth for axlUSDC, axlETH and axlwstETH pairs. The liquidity for these three would serve USDC, ETH and wstETH bridging demand across 7 chains (including from mainnet); as KyberSwapâs liquidity settings and aggregator routing are particularly well suited to enable Axelar to provide the best combination of bridging experience and bridging fees. Axelar would also get exposure to KyberSwapâs large community.
KyberSwap is also expanding to a wide variety of chains (already on 14 chains), which is aligned with Axelarâs multi-chain efforts.
KyberSwap and Axelar teams have been working together on several initiatives such as:
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KyberSwapâs integration of Axelar and Squid for seamless cross-chain swaps on our swap UI.
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Axelar is used as a solution to bridge KNC tokens across selected chains.
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Kyber has seeded several pools for Axelar. Kyber also launched many different liquidity farms together with Axelar on Arbitrum, Optimism, Polygon, Avalanche and Linea.
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Kyber also offers its support to third-party DeFi projects, facilitating the initiation of liquidity bootstrapping programs that involve axl_token pairs.
Impact: KyberSwap brings substantial benefits to the Axelar ecosystem
- For Bridging: KyberSwap offers custom fee tiers which allow Axelar users to perform cross chain swaps through an origin chain pool and a destination chain pool for only 1.6 to 3.2 bps, depending on the asset and route. KyberSwap farms uniquely incentivize narrow and optimized liquidity to enable minimized slippage. Together, the low fees and slippage make for the best crosschain user experience in DeFi, with some of the best USDC, ETH and wstETH crosschain swap/bridging options in the entire market.
- For Traders: KyberSwap aggregates liquidity from different DEX pools (including KyberSwapâs), getting the optimal trade route and best price for axlUSDC, axlETH and axlwstETH. This may even route volume to external DEXes, thus further contributing to the overall Axelar ecosystem. Traders can identify potential trading opportunities by using KyberAI, which leverages artificial intelligence to track tokensâ on-chain and off-chain metrics and discover exclusive alpha for traders.
- For Liquidity Providers: LPs deposit tokens into liquidity pools and earn compounding fees. Pools are flexible and have features such as anti-sniping and concentrated liquidity, mimicking higher levels of liquidity and achieving better capital efficiency, volume, and returns. By extension, this means axlUSDC, axlETH and axlwstETH liquidity providers would be able to enjoy higher capital efficiency, and AXL grants used as incentives on KyberSwap would result in a much bigger impact on liquidity and swap rates compared to other DEXes.
- For Developers: Dapps and wallets can easily integrate with KyberSwap pools and aggregation API to provide the best swap rates for Axelar assets for their own users, saving time and resources.
- For AXL token holders: With KyberSwap users receiving AXL incentives via selected yield farms, AXL awareness and adoption would increase; growing the overall Axelar ecosystem.
- Marketing: In addition, KyberSwap has a large community on our social media channels (e.g. 295K Twitter followers). KyberSwap can also provide marketing support and resources to promote the launch of Axelar liquidity pools and farms, thereby spreading more awareness about Axelar.
Goals, Deliverables, Timeline, Milestones, KPI: How AXL incentives would be used on KyberSwap
Goals
KyberSwap plans to use Axelarâs AXL grants to bootstrap and deepen liquidity for axlUSDC and axlwstETH. This is achieved by seeding liquidity and incentivizing liquidity providers to deposit liquidity (and yield farm) into KyberSwapâs concentrated liquidity pools, which would enable much more efficient use of precious capital and enable greater trading volume for the tokens involved.
Deliverables
KyberSwap is requesting $111,000 in AXL to be used as yield farming incentives over 3 months for axlUSDC on Arbitrum, Optimism, Polygon, Polygon zkEVM, zkSync and Linea; and for axlwstETH pairs on Arbitrum, Optimism, and Polygon. KyberSwap would work with the Axelar team closely to create and optimize the liquidity pools. KyberSwap would also be seeding axlETH-ETH pairs across 6 chains; and investing marketing resources to raise awareness for the joint yield farming campaigns with Axelar.
KyberSwap would utilize the AXL grants in a sustainable manner to maximize liquidity retention and increase organic volume. All AXL grants will be distributed directly to axlUSDC and axlwstETH farms at the start of each farming phase.
At the end of 3 months, all involved parties will review the performance of all axlUSDC, axlETH and axlwstETH pools and discuss how to continue, after which another proposal will be made.
Timeline
3 months
Milestones and KPI
We aim to attract about $600k in TVL at about 12% farm APR for axlUSDC/USDC pairs, and about $1m in TVL at about 12% farm APR for the axlwstETH/wstETH pairs on each chain; improving liquidity and trading volume for the selected pairs. We also aim for an increasing pool APR supported by organic volume from bridging demand.
Risks
KyberSwap Elastic and Classic pools have been audited by ChainSecurity, while KyberDAO & KNC have been audited by Hacken.
- ChainSecurity audit: KyberSwap Elastic - Chainsecurity Smart Contract Audit
KyberSwap statistics
- 60+ DeFi/GameFi Dapp integrations
- Over $20 Billion+ worth of lifetime trading volume
- 400K web visits (Average last 3 months - similarweb)
- 616K cumulative lifetime unique users on Ethereum (New + Legacy KyberSwap)
- 7,000 average DAU
- 15,000 average daily transactions
- Current total TVL on all KyberSwap pools: $48M+
- Total TVL from aggregated DEXes: $35B+
KyberSwap is a high-performing DEX on various chains in terms of volume. Source: Defillama (24th August 2023)
- Top 1 DEX on Linea
- Top 3 DEX on Optimism
- Top 5 DEX on Arbitrum
- Top 8 DEX on ZkSync Era
Key KyberSwap Features
DEX Aggregation Algorithm and API
KyberSwapâs aggregation algorithm aggregates liquidity, automatically searching multiple DEXes on a chain to identify and select the optimal trade routes and prices for users. KyberSwap makes trading more efficient and saves time and money for thousands of users. KyberSwap sources liquidity from over 70 different DEXs such as Uniswap, Sushi, Curve, and many others to achieve the most optimal rates for traders on supported chains.
Concentrated/Amplified Liquidity Pools
Elastic Pools: Liquidity providers (LPs) can deposit tokens into Elastic pools and earn compounding fees. Pools have customizable price ranges and features such as anti-sniping and concentrated liquidity, mimicking higher levels of liquidity and achieving much better capital efficiency, volume, and returns.
Classic Pools: On Classic pools, LPs have the flexibility to create or select amplified liquidity pools with an amplification factor that greatly improves capital efficiency and help reduce trade slippage.
As such, liquidity providers (such as AXL or axlUSDC LPs) can achieve greater capital efficiency, rates, volume, and returns compared to other platforms. LPs earn more in an efficient manner. Moreover, LPs earn trading fees that are automatically claimed when you withdraw your liquidity.
Limit Orders
KyberSwap users can set Limit Orders to ensure they automatically buy/sell assets at a desired price. A buy limit order will be executed only at the limit price or a lower price. A sell limit order will be executed only at the limit price or a higher one. This is another useful trading feature for AXL holders who want to buy more AXL at lower prices without staring at the screen 24/7.
KyberAI
KyberAI leverages artificial intelligence to track tokensâ on-chain and off-chain metrics and discover elusive alpha for traders. For example, users are able to analyze various factors such token CEX net inflow, funding rate, trading volume, transactions, holders, and price, as well as viewing which tokens are âBullishâ, Trendingâ and âTrending Soonâ based on aggregated data from CoinGecko and Coinmarketmap, and our proprietary KyberScore.
Previous projects KyberSwap has contributed to:
Kyber is a mature project that is a pioneer in the Ethereum and DeFi space and has been operational for 4+ years.
- The team initiated and co-launched Wrapped Bitcoin (WBTC), the most used wrapped version of BTC in the DeFi space today, and we aim to bring similarly innovative initiatives to the Axelar ecosystem.
- Created the Waterloo Cross-chain Bridge in 2019, a decentralized practical bridge between EOS and Ethereum, which inspired NEAR protocolâs Rainbow Bridge
- Kyber was the most used DeFi protocol in 2019, according to Binance Research.
- KyberSwap has partnered with Lido Finance to bring low slippage, optimized liquidity for liquid staking pairs such as wstETH (as well as USDC, ETH, LDO liquidity) on Ethereum and other chains.
- KyberSwap collaborated with QiDAO to open a KNC vault and support KNC as collateral on Polygon, Arbitrum, and Optimism, while also optimizing liquidity for the MAI stablecoin using KyberSwap Elastic pools.
- Kyber has organized and participated in various hackathons that contributed to the launch of top DeFi projects. Examples:
- Kyber DeFi Hackathon 2019 with our partners Enzyme Finance (previously called Melon), Synthetix, Chainlink, bZx, Compound, and WBTC, helped launch Zapper (previously called DeFiZap)
- Kyberâs bounties in Ethereum hackathons such as ETHSingapore and ETHBerlin helped launch 1inch
- InstaDapp won a Kyber bounty with their integration in ETHIndia 2018, contributing to their successful launch.
About KNC (Kyber Network Crystal)
If KyberSwap is able to receive AXL incentives from the Axelar grant, the team will also supplement them with KNC incentives to further benefit Axelar and KyberSwap users. We are happy to discuss with the Axelar team and community about a suitable amount of KNC incentives for Axelar liquidity pools.
KNC is Kyberâs utility and governance token, and is an important part of KyberSwap operations. KNC holders can stake KNC on KyberDAO to vote on Kyber Improvement Proposals. In return, KNC voters receive rewards coming from fees collected through KyberSwap trading activity. As more trades are executed and new protocols added, more rewards are generated.
- KNC information on CoinGecko: https://www.coingecko.com/en/coins/kyber-network-crystal
- KNC on Etherscan: 0xdeFA4e8a7bcBA345F687a2f1456F5Edd9CE97202
Please give us feedback and thank you for considering our proposal!
