Self-Instruct
Kyberswap is an on-chain liquidity protocol that enables decentralized token swapping on the Ethereum blockchain. The protocol allows users to trade tokens without needing to trust a centralized exchange. Instead, Kyberswap leverages a network of liquidity providers to ensure that users can always execute trades at the best possible rates.
Kyberswap Elastic and Kyberswap Classic are two different versions of the Kyberswap protocol with their unique features and benefits. In this article, we’ll explore the biggest difference between Kyberswap Elastic and Kyberswap Classic.
Kyberswap Classic
Kyberswap Classic is the original version of the Kyberswap protocol that launched in 2018. It was designed to provide a secure and reliable way for users to trade tokens on-chain without the need to rely on a centralized exchange. Kyberswap Classic works by allowing liquidity providers to deposit their tokens into a smart contract that acts as a pool of liquidity.
When a user wants to trade one token for another, Kyberswap Classic searches for the best rate across all the available liquidity pools and executes the trade automatically. This means that users do not need to worry about finding a counterparty or negotiating a price. The trade is executed instantly, and the user receives their new tokens directly into their wallet.
One of the key benefits of Kyberswap Classic is that it provides users with access to a wide range of tokens. The protocol supports over 80 different ERC-20 tokens, which can be traded against each other. This provides users with a high level of flexibility when it comes to trading, as they can easily swap between different tokens without the need to transfer their assets to a centralized exchange.
Another benefit of Kyberswap Classic is that it is fully decentralized. This means that users do not need to trust a centralized exchange to hold their funds or execute trades on their behalf. Instead, all trades are executed on-chain, and users retain full control over their assets at all times. This makes Kyberswap Classic a popular choice for users who prioritize security and decentralization.
Kyberswap Elastic
Kyberswap Elastic is a newer version of the Kyberswap protocol that launched in 2021. It was designed to address some of the drawbacks of the original Kyberswap Classic protocol and provide users with an improved trading experience.
One of the biggest differences between Kyberswap Elastic and Kyberswap Classic is the way liquidity is provided. With Kyberswap Elastic, liquidity providers can deposit their tokens into a smart contract that uses an algorithmic market maker to provide liquidity. This is different from Kyberswap Classic, where liquidity is provided by a group of pre-approved liquidity providers.
The algorithmic market maker used by Kyberswap Elastic is designed to adjust the price of the token based on supply and demand. This means that as more users buy a particular token, the price of that token will increase, and as more users sell a particular token, the price of that token will decrease. The algorithmic market maker ensures that there is always enough liquidity in the pool to execute trades and that users can always get the best possible price.
Another difference between Kyberswap Elastic and Kyberswap Classic is that Elastic supports more advanced trading features. For example, users can place limit orders on Elastic, which means that they can set the price they want to trade at and wait for the market to reach that price before executing the trade. This enables users to take advantage of market movements and potentially get better prices for their trades.
Kyberswap Elastic also offers lower gas fees compared to Kyberswap Classic thanks to its use of an algorithmic market maker. With Kyberswap Classic, gas fees can be high because liquidity providers need to actively manage their pools to ensure that there is enough liquidity. With Kyberswap Elastic, the algorithmic market maker takes care of this, which means that there is no need for active management, and gas fees are reduced.
Which one should you choose?
The choice between Kyberswap Elastic and Kyberswap Classic ultimately depends on your trading preferences and priorities. If you value flexibility and a wide range of token options, Kyberswap Classic may be the better choice for you. Similarly, if you prioritize decentralization and security, Kyberswap Classic may be the better choice.
On the other hand, if you are looking for a more advanced trading experience and want to take advantage of features like limit orders, Kyberswap Elastic may be the better choice for you. Additionally, if you want to save on gas fees and do not want to actively manage your liquidity pools, Kyberswap Elastic may be the better choice.
Conclusion
Kyberswap is a powerful on-chain liquidity protocol that enables decentralized token swapping on the Ethereum blockchain. Whether you choose Kyberswap Elastic or Kyberswap Classic, you can be assured that you are getting a secure and reliable way to trade tokens without the need to rely on a centralized exchange. Both versions of the protocol have their unique features and benefits, and the choice between them ultimately depends on your trading preferences and priorities.