A 27-year-old PhD holder has a plan to make blockchain mainstream

Loi Luu, co-founder of Kyber Network / Image credit: Terence Lee

You’re at McDonald’s. Starving, you fish out some McCoins from your wallet to pay for food. Later, you head to an Apple store to buy an iPhone. But you’re out of iCoins. So, you visit a money changer to exchange your dollar notes for them. While you’re at it, you buy some Amazoncoins and Grabcoins, just in case you run out.

This may sound ludicrous, but it’s a scenario cryptocoin owners face. Depending on where you live, converting fiat money like Singapore dollars into ether – the currency of Ethereum – can be troublesome. Then there’s the matter of converting ether into niche blockchain tokens like gifto or BAT, which are used only within their own ecosystems. To do all of the above, you need to use multiple exchanges.

That’s not ideal. The rise of Ethereum and decentralized apps (dapps) could cause thousands of tokens to coexist, creating a messy digital feudalism. A decentralized economy, which wrestles control away from governments and corporations, works better if you can painlessly convert one coin to another. The dream is that owning ether should give you access to all the dapps in the world.

But if Loi Luu has his way, you may not need to own ether either.

Luu is a 27-year-old Vietnamese PhD graduate in computer science from the National University of Singapore (NUS). He did research on cryptocurrencies and the security of smart contracts – a crucial feature in any blockchain that allows the automatic exchange of assets.

He is also the CEO and co-founder of Kyber Network, a Singapore-headquartered exchange for cryptocurrencies that, with just a prototype, raised US$52 million worth of Ether in an initial coin offering (ICO). It’s a sizable amount even for a bubble-prone ICO scene.

Kyber is impervious to hackers and does not need a tedious verification process.

Kyber’s deep bench of talent is revered in the Ethereum community. Its other co-founder and CTO, Yaron Velner, also has a PhD in computer science and studied game theory incentives in blockchain protocols. One of Kyber’s advisors is the inventor of Ethereum himself, Vitalik Buterin.

The startup is building something novel: a simple-to-use and completely decentralized exchange (DEX) that lives entirely on the blockchain. The exchange aims to convert one cryptocurrency to another within seconds and can be integrated into all kinds of dapps to allow the seamless conversion of digital assets. When Kyber receives an order, its smart contract withdraws tokens from reserves run by third-parties that are responsible for ensuring the liquidity of the network.

“We looked for existing solutions to see if they are addressing the problem completely, but we couldn’t find any that could convince us,” says Luu. So he began building his own.

However, Kyber only addresses one part of the process. You’ll still need to use centralized exchanges to convert fiat money into cryptocurrencies – which Kyber doesn’t do.

But because it’s fully on the blockchain, Kyber is impervious to hackers and does not need a tedious verification process. After all, blockchains are designed to be “trustless” – it automates identity and transaction verification. Its setup process involves just one step: connecting to your cryptocurrency wallet.

Meanwhile, centralized exchanges require you to submit your personal documents to verify your identity when linking your bank account with the exchange. It can take days. The transfer of money from the trader to the exchange also happens outside of the blockchain, making it vulnerable.

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