The blockchain development and investment firm Hashed released a report named “The Proper Value of KNC after Katalyst” on Jun 04, comparing several crypto-projects related to exchange / liquidity provision and heavily endorsed the Kyber Protocol and its token Kyber Network Crystals (KNC) declaring that “KNC’s potential value massively outweighs its present value”, especially in light of the anticipated Katalyst upgrade launch expected at the end of this month.
@KyberNetwork announced its major update ‘#Katalyst‘ last December. Through this update, Kyber changed its token model and launched #KyberDAO. #Hashed explored and analyzed what impact this recent update could bring to the #KNC token value. https://t.co/4ippJtfKvT— #Hashed (@hashed_official) June 5, 2020
The Hashed report noted that the conventional KNC token model dictates that network fee (in the native token) proportionate to the trading volume be burnt. So, the Kyber Network usage increases the value of its tokens, due to rising scarcity, caused by burning of tokens depending on the network’s transaction volume. However, the Katalyst upgrade would allow additional means of capturing the value of the network and rewarding KNC holders. The blockchain analysis in the report applied traditional financial analysis techniques to determine the value of several similar tokens.
Hashed Usage Of Traditional Financial Metrics To Evaluate KNC
The report mentions the usage of comparable company analysis (CCA) to compare Binance Coin (BNB), Huobi Global (HT), OKEx (OKB) and Kyber Network Crystals (KNC). The method calculates the value of a company by using the metrics of similar companies in the same category. The reference point used was price to earnings ratio (PER). On the closing date of April 30, the PER for BNB was found to be 17.21x, for HT 9.48x, for OKB 21.63x and for KNC 19.20x (on the assumption that 50% of the KNC tokens will be staked after Katalyst launch). According to the report, this shows that “KNC is maintaining an appropriate price level in comparison to other exchange tokens”.
Bottom Line
The analysis revealed that KNC token’s optimal price should be ~ $1.091 and in an optimistic scenario ~ $2.645. The Hashed report places great confidence in the Kyber Protocol project, because of the upcoming Katalyst upgrade. The upgrade would enhance the utility of the native token, create new use cases, incentives and rewards for holders. The KyberDAO launch would give users voting rights and rewards in Ethereum (ETH) token, as an incentive for participating in governance and promoting decentralization. After Katalyst launch, the KNC token would further capture value from the network by providing voting rewards for active participants, allowing payment of protocol fees through the token of transaction rather than only KNC (eliminating risks / barrier of entry and enhancing adoption / usage) and tweaking the network parameters as per situation by decentralized governance for optimized functioning.
Kyber Network was the most used project in the whole of DeFi in 2019 according to Binance Research. Kyber currently provides transaction liquidity to 85+ 100+ Dapps, including crypto wallets like Argent, Enjin, and Trust, decentralized exchanges(DEX) such as its in-house product KyberSwap.com, Defi protocols, payment services, blockchain games, and so on. Since its mainnet launch in early 2018, Kyber Network has demonstrated rapid growth in terms of transaction amount — successfully processing over $1B USD as of May 2020. It is noteworthy that Kyber processed $195M worth of transactions in just one month, March 2020.
