This Step-by-Step Guide to the Kyber Exchange shows how to use Kyber to exchange one cryptocurrency for another directly from your cryptocurrency wallet. Kyber is a new decentralized cryptocurrency exchange that provides near-instant exchange of cryptocurrency without deposits, withdrawals, and the fees that accompany centralized cryptocurrency exchanges. Kyber is a potential game-changer in the crypto space because it offers a low-cost, decentralized, near-instant, highly-liquid, and, most importantly, extremely simple way to exchange cryptocurrency. For advanced users, Kyber also offers additional control over the exchange rate and transaction speed and cost. Kyber currently supports exchanging ethereum and approximately 24 ethereum-based tokens. However, Kyber is still in its early stages and we look forward to it incorporating more cryptocurrencies and features. Let’s get started!
One of the biggest advantages of Kyber is that it offers cryptocurrency investors and traders a simple way to exchange cryptocurrency. Still, if you are like us, you want to know how it all works. Here are the basics. First, the cryptocurrency buyer sends his or her token out to the Kyber smart contact, which credits that token to a reserve pool of cryptocurrencies. Second, the Kyber smart contract debits the token sought by the buyer from the reserve pool and sends that token to the buyer. For example, this Step-by-Step Guide will show ethereum sent out to the Kyber smart contract and Request Network token sent back. There are a lot more details available in Kyber Network’s video explanation and this in-depth analysis from Jake Hallac.
Visit Kyber.Network and select “get started” to exchange cryptocurrency on Kyber. Since there are no withdrawals or deposits with Kyber, you will choosethe type of cryptocurrency wallet [we suggest you consider a Ledger or Trezor] to use in buying cryptocurrency. If you do not have a Ledger or Trezor, review our step-by-step guide to learn how to create a MetaMask wallet and deposit ethereum into it. This Step-By-Step Guide will connect to Kyber with a Ledger, but the trading process is almost identical no matter which wallet you connect to Kyber. We strongly suggest that you not connect with a private key unless you understand and accept the risk of revealing your private key to hackers or malware that may have infiltrated your computer.
Kyber will display the ethereum addresses associated with the wallet you connected. For example, Kyber displayed that our Ledger wallet has an ethereum address with 0.098223 ETH. Select the import button next to the cryptocurrency and address that you want to trade with.
Kyber’s simple and intuitive trading screen will appear once your wallet is connected. The upper right shows your wallet address and the total value of your cryptocurrency holdings in U.S. dollars for the coins supported by Kyber. Below that is a list of your cryptocurrency holdings for the coins supported by Kyber. The remainder of the trading screen is just one box to select the cryptocurrency you want to sell and enter the amount to sell, one box to select the cryptocurrency you want to buy and the amount to buy, a listed exchange rate, and a button to exchange. Many users will enter the information on this simple interface, select the exchange button, confirm the exchange, and be done with Kyber in less than one minute. Let’s dig into the details and advanced features of Kyber though!
To view all the cryptocurrencies supported by Kyber select the drop-down in the upper-right. From this menu you may select any cryptocurrency you want to exchange for another. We selected ETH because we intend to exchange ETH for REQ.
You can also select the cryptocurrencies you want to exchange from drop-down menus on the trading screen. For example, select the drop-down box underneath the “to” field to choose the cryptocurrency you want to buy. We selected REQ because we want to trade for Request Network token.
The exchange rate offered by Kyber is displayed front and center. The below screenshot shows, for example, an exchange rate of 1 ETH for 2682.986 REQ. It is important to understand that rates can change in the seconds between your transaction being sent and filled. This is called slippage. While most users may not care about some slippage, you can reduce negative slippage risk by setting a minimum rate in the advanced settings in Kyber, which we cover below.
Kyber obtains the exchange rate from multiple exchanges to reach a market rate. Kyber has a small spread between the buy price and sell price that it rewards to the people who manage reserve pools and make decentralization possible on Kyber. As shown later in this step-by-step guide, the exchange rate provided by Kyber is competitive with the most popular exchanges and many users will save money with Kyber because there are no withdrawal fees.
Kyber makes it easy to exchange your entire balance of one cryptocurrency for another. Just select the button next to your address balance to auto-fill your entire balance for exchanging.
Most users will likely exchange cryptocurrency on Kyber without exploring the advanced settings. In fact, we like how Kyber put advanced settings in a separate area because it helps maintain a simple trading screen for the majority of users who likely will not care about having “penny-level” control over their transaction. For this step-by-step guide though, we want to give you the full picture of how Kyber works by using the advanced settings. There are two primary advanced settings — gas price and minimum rate — that give you greater control of your transaction.
The gas price is the transaction fee paid to the ethereum network for the exchange of one cryptocurrency into another. You can select a fast transaction (high gas/cost), standard transaction (medium gas/cost), or slow transaction (low gas/cost). You may also manually enter the gas price. One benefit of paying a higher gas cost for a faster transaction, as shown below, is that it reduces the time for slippage to occur between your order being sent and executed.
You can lower your transaction cost if you select a slower transaction speed. However, the difference between a standard transaction fee and lower transaction fee on Kyber is currently very small and may not be worth the increased risk of slippage.
The minimum rate sets a floor on the exchange rate. For example, our transaction below had an exchange rate of 1 ETH For 2,667.669, but could execute as low as the minimum exchange rate of 1 ETH for 2597.3684. Set the minimum rate too high and your transaction may not succeed, particularly if the price is moving quickly, i.e., the price is volatile. Set the minimum rate too low and you may find yourself paying more for the token than you anticipated, particularly if the price is volatile.
Before we set a minimum exchange rate and for this Step-by-Step Guide, we first checked the exchange rate of ETH for REQ on one of the leading centralized cryptocurrency exchanges, Binance. Binance offered a slightly better price at the time — we could have set a limit order at the top of the order book at a rate of 2677 REQ for 0.99000814 ETH. We could have also placed a market order on Binance at a slightly better price than the exchange rate on Kyber. That is not the full story because Binance currently charges an exorbitant 16.5 REQ (about $4.95 USD at the time) to withdraw REQ to a wallet. Therefore, assuming you store cryptocurrency off the exchange, Kyber would ultimately cost less than the centralized exchange due to no withdrawal fees.
Now that we have explored the advanced features in Kyber, it’s time to place an order to exchange one cryptocurrency for another. Enter the cryptocurrency you want to exchange and the amount to exchange in the “from “box. Enter the cryptocurrency you want to receive in return in the “to” box and Kyber will auto-fill the amount you will received based on the estimated exchange rate. Finally, if you want to use the advanced features, enter the minimum exchange rate and select or enter a gas price. Select exchange to proceed.
For this example, we manually entered 0185856 ETH as the amount to exchange for REQ. Kyber then auto-filled 497.666691 REQ as the amount we would receive at the estimated exchange rate of 1 ETH = 2677.699. We used the standard gas price, but increased the minimum rate to 2670 REQ in order to avoid a lot of slippage.
After you select exchange, Kyber will display an order summary and ask you to confirm the order. For example, Kyber displayed that we were placing an order for 497.666 REQ, with a maximum 0.2% slippage, gas price of 4 Gwei, and transaction fee of 0.000973 ETH. Select confirm to place your order on Kyber.
If you are using a Ledger, Trezor, or Metamask wallet, the final step is to confirm the order on your wallet. For example, our Ledger wallet displayed the transaction and asked us to decline or confirm the transaction.
After you confirm the order with your connected wallet, Kyber will display that your order has been broadcast to the ethereum network. You may select the transaction address to view more details.
Kyber will then display that your transaction is done and successful. For example, less than one minute after we placed our order we received notice that we had successfully exchanged our ETH for 497.1752 REQ. In summary, Kyber offers a low-cost, decentralized, trustless, near-instant, highly-liquid, and, most importantly, extremely simple way to buy cryptocurrency. For advanced users, it offers even penny-level control over the exchange rate and transaction speed/cost. We are excited for Kyber to support more cryptocurrencies in the future, including non-ethereum cryptocurrencies.