KyberNetwork is a trustless decentralised exchange and payment service. The protocol is designed to be on-chain, meaning all transactions will be written to the Ethereum blockchain. The white paper invokes trustless decentralised execution, instant trade and high liquidity.

The big trade-off with doing anything on-chain is that you can only process transactions, or trades, as fast the underlying blockchain network.

Loi Luu, CEO of KyberNetwork, said: "So basically with the current transaction rate in Ethereum we can easily support 10-20 trades per second, which is good enough for an exchange of an average size. Note that KyberNetwork requires only one transaction per trade, so it's the minimum number of transactions per trade that any decentralised exchange can support.

"We do realise the future scalability challenge though. For KyberNetwork it's a good problem to have since we will have significant adoption. That said, we expect that proof of stake/sharding will be ready by then to address the issue."

The long-term goal is to incentivise independent liquidity providers, or "reserve managers", and garner a completely decentralised network effect. To get the ball rolling, KyberNetwork itself will be the first main reserve manager. "We expect to be able to serve a daily trading volume of 1 million ETH with a reserve of size 100K ETH," said Luu.

On the subject of state channel and offchain solutions, he said Kyber is following progress closely. "We think that offchain solutions, as much as we like it, do not have the guarantee that onchain solutions like KyberNetwork provide. For example, it's hard to prevent people from spamming the order book, filling in fake orders and aborting to settle. Furthermore, we require only one transaction per trade, which is the same as the best offchain solutions that we are aware of. Hence, in terms of scalability, we are not worse than others."

The spread on token pairs can be expected to tighten as more reserve managers join the network, and they learn to mitigate volatility of crypto assets. Luu said: "The reserve managers will need to consider different parameters in order to make prices and set the spread. For example, if a token is too volatile, the spread will be higher to accommodate for the risk. We will address this in detail in our upcoming blog posts.

KyberNetwork also provides payment APIs that will allow Ethereum accounts to easily receive payments from any crypto tokens. As an example, any merchant can now use KyberNetwork APIs to allow users to pay in any crypto tokens, but the merchant will receive payments in Ether (eth) or other preferred tokens.

KyberNetwork's roadmap includes supporting cross-chain trades between different cryptocurrencies using relays and future protocols like Polkadot (Parity Technologies) and Cosmos (Tendermint).

But are we in crypto bubble territory? "I think calling it a token bubble is not entirely correct," said Luu. "I call it a trend and a new way to enable founders to get funding, investors to invest in the interesting and good projects. Maybe token is still in its early stage so you might have seen several bad examples, but it doesn't reflect the bigger picture of the entire ecosystem.

"I have heard from at least two different groups of reputable people who wanted to set out some standards for ICO/token launch events to protect investors and support inexperienced founders/ teams too.

"So I would say we should wait for a couple of years when things are more stable, people get used to with the new technologies, new platforms, to see how the ecosystem evolves."