In brief

  • One of silicon valley’s most DeFi friendly firms has made an investment in the future of decentralized governance.
  • ParaFi plans to participate in governance by staking KNC with the forthcoming KyberDAO.
  • The DeFi industry has grown from $1 billion in total market cap to more than $5 billion in two months.

Kyber Network is getting a boost from one of DeFi’s most prominent investors.

DeFi’s leading liquidity protocol Kyber Network announced on Thursday an investment from ParaFi Capital in Kyber’s KNC protocol token. The investment is the beginning of a partnership that will give Kyber access to one of Silicon Valley’s most important professional networks, providing technical support for development of the protocol and access to new investment and market-making opportunities. 

ParaFi Capital is both an investor in and user of DeFi protocols. The firm has also made early stage investments in other prominent DeFi leaders, including Compound and MakerDAO. ParaFi partners come from a diverse set of financial backgrounds, including careers at asset management firms KKR & Co, TPG Capital, and JP Morgan. ParaFi declined to disclose the amount invested in KNC tokens to Decrypt.


ParaFi’s investment in a formidable DeFi player in Kyber comes at an opportune time. Last April, total market capitalization for all DeFi tokens stood at just $1 billion. Today, that market cap has ballooned to more than $5 billion, aided in large part by the surge in interest in Compound and its COMP token. Kyber’s KNC tokens, nevertheless, rank fifth on DeFiMarketCap’s list of most valuable coins.

Kyber provides on-chain token swaps and provides liquidity for a variety of wallets and other decentralized applications in the cryptocurrency industry. ParaFi will help bring professional market makers into DeFi through Kyber’s Fed Price Reserve (FPR) liquidity system.

“ParaFi Capital has been a driving force in the governance and growth of DeFi,” Kyber CEO Loi Luu said in a statement. “With their support and active participation in the KyberDAO, we are confident that we can bring Kyber’s role as the liquidity layer for DeFi to the next level.”

In addition to opening doors to marketing and technical support for Kyber, ParaFi intends to become an active part of the Kyber community, staking KNC tokens and voting on proposals following the launch of Kyber’s forthcoming governance organization, KyberDAO. 

KyberDAO is expected to launch in the second quarter of 2020 as a component of the Katalyst update. Similar to Compound’s COMP token holders, KNC token holders will receive Ethereum (ETH) rewards from transaction fees collected from the Kyber Network.


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