Kadvun represents a paradigm shift in decentralized finance by introducing the first blockchain-enabled open-source purchasing platform that seamlessly bridges the real and virtual worlds.
This whitepaper outlines the technical architecture, economic model, and implementation details of the Kadvun ecosystem. Kadvun enables instant, trustless exchange of digital assets with exceptionally high liquidity through a novel reserve-based architecture, eliminating the need for traditional order books while maintaining security and decentralization.
Key innovations include:
We design and build Kadvun, an on-chain protocol that enables the instant exchange and conversion of digital assets (e.g., crypto tokens) and cryptocurrencies (e.g., Ether, Bitcoin, ZCash) with exceptionally high liquidity.
Kadvun is set to be the first system to implement several ideal operating properties of an exchange, including:
Besides serving as a decentralized exchange, Kadvun also provides payment APIs that allow Ethereum accounts to easily receive payments from any supported crypto token.
Example Use Case: Any merchant can now use Kadvun's APIs to allow customers to pay in any crypto token, but the merchant will instantly receive the final payment in Ether (ETH) or another preferred token.
While Kadvun initially runs on the Ethereum network, our roadmap includes supporting cross-chain trades between different cryptocurrencies. This will be achieved using relays and future protocols like Polkadot and Cosmos.
This cross-chain functionality will enable Ethereum accounts to safely receive payments from Bitcoin, ZCash, and other cryptocurrencies via our payment APIs, establishing a trustless payment infrastructure across different chains.
Emerging cryptocurrencies such as Bitcoin, Ethereum, and others have been gaining significant traction because they allow users to transact and manage their digital assets in a decentralized and trustless model, without relying on a third party. More interestingly, the Ethereum network, with its Turing-complete scripting language and trustless smart contracts, makes it easy to issue and digitalize custom crypto tokens. These tokens can represent real-world assets (e.g., Digix Gold token) or hold value within a specific platform (e.g., Golem Network token, Gnosis token, Augur token, and so on). To date, the total market capitalization of the most popular cryptocurrency assets is $72 Billion USD. This total market cap has tripled in the last five months and continues to grow.
As the Blockchain market grows and more crypto assets are introduced, the need to convert and exchange between crypto tokens is ever-increasing. The trade volume between, for example, ETH and Bitcoin is worth hundreds of millions of dollars per day on major exchanges. The total trade volume between ETH and other crypto tokens on its network, most of which are less than two years old, is also in the range of millions of dollars.
However, despite the decentralized and trustless nature of cryptocurrencies and crypto tokens, most of the trades occur on centralized exchanges which are vulnerable to internal fraud and external hacking. This is an ongoing concern, and a number of hacking incidents have been reported at various exchanges, affecting thousands of users and resulting in the loss of hundreds of millions of dollars.
Existing exchanges—including both centralized and decentralized ones—often require users to wait for several minutes before allowing them to withdraw their funds.
The quest to build decentralized exchanges has been initiated by several parties on the Ethereum network. Although these parties build decentralized and trustless exchanges, they are still vulnerable to external manipulation because there is a delay between when an order is created and when it is accepted in a block.
There are other possible reasons why existing decentralized exchanges are not as popular as expected, despite having better security features:
As the number of ICOs increases, so does the introduction of new crypto tokens. It is logical to assume that investors will acquire a variety of desired crypto tokens as part of their investment strategy. The convertibility of one crypto token to another represents a new challenge for both investors and operators alike.
For instance, it may be a challenge for any party to allow an already deployed contract to accept new crypto tokens as a form of payment. This proliferation also introduces more room for implementation bugs and security flaws. As an example, a major bug during the DAO Token ICO distributed more tokens to SNGLS contributors than to ETH contributors, despite them contributing the same amount. Thus, there is a clear need to simplify the payment procedure for token holders, merchants, and users on the network.
We introduce Kadvun, an on-chain decentralized exchange providing several useful applications, including building a practical exchange and offering payment APIs for merchants and users to instantly and effortlessly convert tokens "trustlessly."
Our system allows users to convert their existing token A to a different type of token B and send it to another user who only accepts payment in B—all in one single transaction.
More interestingly, Kadvun introduces a new standard contract wallet to allow existing smart contracts, which currently only accept a few tokens, to receive payments from any future tokens supported by Kadvun without any modification to the contract code. This enables contracts or merchants to access a wider class of users, receiving payments and contributions in any supported tokens.
Kadvun's design features several novel constructions to support all these applications:
The network involves five distinct roles:
The actors interact with the smart contract independently:
Kadvun guarantees high liquidity by leveraging a dynamic pool of existing reserves in the network.
When a trade/conversion request arrives, Kadvun:
We note that upon launch, Kadvun will likely start with only a single reserve provided by us as the main source of liquidity before other reserves are registered.
Why Reserves Should Join Kadvun: Kadvun creates a platform for reserve managers to monetize their otherwise idle assets. By serving trade requests from users, reserves earn profit from the spread they define.
Kadvun consists of the following major components:
Core exchange logic implemented as audited, upgradable smart contracts on Ethereum.
Distributed network of liquidity providers maintaining token reserves for instant trades.
RESTful APIs enabling seamless integration with wallets, merchants, and applications.
A Minimum Viable Product (MVP) was released in August 2017.
Kadvun supports different API commands for Users, Reserve Contributors, Reserve Managers, and the Kadvun Operator.
Callable by any Ethereum account (normal or contract):
Transfer(amount, source token, destination token, destination address)
amount of the source token (Token A) to the destination token (Token B) and sends the type B tokens to the destination address.Transfer(100, "DGD", "Melon", "0xb794f5...") converts 100 DigixDao tokens to Melonport tokens and transfers them to the specified address.GetExchangeRate(token A, token B)
Callable by any account in the Ethereum network (relevant only for public reserves):
ContributeReserve(token type, amount)
amount of a certain token type to the reserve. The contributor receives an equivalent amount of reserve tokens/shares to represent their contribution (similar to MelonFund's model).WithdrawProfits()
WithdrawContribution(KDN amount, token type)
SetRate(token A, token B, rate)
ListPair (token A, token B, initial rate)
DelistPair (token A, token B)
AddReserve (reserveAddress)
RemoveReserve (reserveAddress)
Chain relays, such as BTCRelay, enable communication between different blockchains. The launches of protocols like Polkadot and Cosmos will make cross-chain interactions even easier. Kadvun will leverage these technologies to allow Ethereum accounts to receive payments from different cryptocurrencies via a trustless mechanism.
The Kadvun Operator does not hold the users' tokens. By design, user's tokens are secure from theft losses. Users need not trust the intentions of the reserve entity or the KDN token holders, as the integrity of the operation is enforced and ensured by the smart contract.
An exchange or conversion request is executed immediately within a single transaction. Users receive their exchanged token at the exact moment they transferred their original token. No deposit, confirmation, or waiting time is needed. This efficient and user-friendly feature distinguishes Kadvun from most other existing and future exchanges.
The exchange runs entirely on-chain and is accessible to all accounts, including normal accounts and smart contracts. This allows smart contracts to directly interact with the exchange without a third-party intervention, enabling them to receive funds/payments from different tokens that they did not originally support. This feature establishes Kadvun as an on-chain proxy payment platform for all accounts.
Kadvun does not require any modification in the underlying Ethereum protocol or existing smart contracts to function. Our payment API can communicate with existing contracts without requiring any change on their side.
Furthermore, our new contract wallet allows a user to seamlessly pay with Token A to a contract that expects Token B, with the conversion from A to B handled by Kadvun. The receiver will receive the payment as if it was sent by the original user.
We compare Kadvun to existing systems in the table below. (We have intentionally left out Bancor, as they state their focus is on community tokens rather than general-purpose exchange.)
| Feature | Kadvun | Centralized Exchanges | Other DEXs |
|---|---|---|---|
| Trustless | ✓ Yes | ✗ No | ✓ Yes |
| Instant Trade | ✓ Yes | ✗ No | ✗ No |
| No Order Book | ✓ Yes | ✗ No | ✗ No |
| Payment APIs | ✓ Yes | ✗ No | ✗ No |
First and foremost, Kadvun is an exchange. Unlike most existing exchanges, Kadvun executes trade requests instantly. Moreover, Kadvun does not hold users' tokens; thus, any theft or loss of user funds is prevented by design.
This contrasts sharply with most exchanges where a confirmation time of several minutes is typically required. Any malfunction during that waiting period could potentially result in inconvenience or, in the worst-case scenario, the loss of funds.
Conducting an exchange via a smart contract allows users to pay for any service or product with any crypto token they prefer. The Kadvun contract provides instant conversion to Ether (or another desired token) and securely completes the payment on behalf of the user to any contract they wish.
The entire process occurs within a single transaction, and Kadvun never takes possession of the user's tokens (neither the source token A nor the destination token B).
Kadvun's exchange rates are visible to other smart contracts. This transparency enables the implementation of advanced financial instruments such as swap contracts. The quotes provided by Kadvun are inherently secure as they reflect the real rates being used for atomic trades between pairs of tokens.
Due to the general illiquidity of crypto assets, exchange rates often appear volatile due to irregular demand and supply. This issue is aggravated by the lack of parties willing to warehouse crypto assets. This scarcity of options makes it nearly impossible for crypto asset users to hedge against future requirements.
Kadvun will address this challenge by introducing derivatives in the forms of forwards and options to provide more alternatives to users.
A forward is a contract whereby parties agree to trade an asset at a later date at a price specified in the present. One common problem as ICOs become mainstream is the need for some users to convert between tokens, such as from Melon to ETH, in preparation for an upcoming ICO. The user could either acquire ETH at the current market rate or commit to a forward contract to negate the risk of price fluctuations in ETH as a viable alternative.
Options contracts allow users to hedge against adverse price movement for a fee called a premium.
The premium is typically calculated using the implied volatility of the underlying crypto asset. Crypto asset users who need to prepare for a future purchase or sale commitment can pay a premium to buy a call or put option. As an example, holders of idle tokens are able to write call options to earn premiums while forgoing the upside of the price.
The road map for Kadvun includes several key phases.
Develop a Minimum Viable Product (MVP) version of our platform, including the Kadvun wallet, the main Kadvun contract, and our reserve dashboard.
Deploy the first version of Kadvun on the mainnet. We will begin by supporting trades and proxy payments between any token to and from Ether.
This phase can be easily achieved following the smooth implementation of Phase 1. By then, we expect more reserves to join Kadvun.
Once our development and operations stabilize, we will deploy Phase 3 of Kadvun, supporting the trading of advanced financial instruments.
The deployment in this phase allows users to trade between Ether/tokens and other major cryptocurrencies like Bitcoin, ZCash, ETC.
A fixed number of Kadvun tokens (KDN) will be distributed to the public in exchange for Ether contributions. The details regarding the number of KDN distributed and how the sale is conducted will be publicly available on our blog posts and website.
KDN tokens are required for reserves to participate in the network, granting them the right to operate and earn profits from trading activities in Kadvun.
This approach would increase the demand for existing KDN tokens as the trading volume on Kadvun increases. The mechanism also properly rewards all participants who help grow the ecosystem. KDN token holders can easily track the total supply by reading from the contract, without relying on any off-chain accounting firm.
| Contract | Address | Network |
|---|---|---|
| Kadvun Main Contract | 0x... |
Ethereum Mainnet |
| KDN Token Contract | 0x... |
Ethereum Mainnet |
| Reserve Factory | 0x... |
Ethereum Mainnet |
All Kadvun smart contracts have undergone comprehensive security audits by leading blockchain security firms:
This document has been reviewed and approved by the Kadvun Technical Committee on January 15, 2026.
Kadvun Inc. | 50 1st St, San Francisco, CA 94105 U.S
Email: support@buykadvun.com | Phone: +1 (934) 205-7336
Website: buykadvun.com | Document ID: KDN-WP-2026-02
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