On July 2nd, the xToken project announced in a Medium post their intention to combine staking, governance, and the claiming of Kyber Network trading fees into a single ERC-20 token. Starting from July 7th, investors will be able to enjoy passive income from Kyber's decentralized exchange without the need to constantly vote or claim rewards.

Using Ethereum-based decentralized exchanges like Bancor and Unisys, investors are able to add their idle ERC-20 tokens to existing liquidity pools for traders. Kyber Network then aggregates the liquidity from these exchanges in order to maximize trading pairs and find the best rates. 

Kyber's exchange has been integrated into smartphone apps such as the Enjin Wallet and can be accessed via websites like KyberSwap:

A Kyber Network Token (KNC) already exists, however until now the fee model has been under the control of the core team, and the trading commissions have been going to businesses and dapp developers. That being said, the Kyber team intends to distribute fees to the token holders and allow them to vote on protocol changes in the near future.

On July 7th, Kyber will be launching their DAO (Decentralized Autonomous Organization) and investors who stake their KNC tokens will accrue trading fees and be granted the right to participate in governance decisions.

The xToken project have written smart contracts to wrap the complexity of staking, voting, and claiming fees into a single ERC-20 token called xKNC. Investors will be able to add KNC tokens into a pool and mint xKNC tokens that represent their stake on the network.

There will be two versions of the xKNC token:

1. xKNCa will always vote to increase the stakers' fees. This option is ideal for investors who want to maximize their returns and accumulate more KNC.
2. xKNCb will always vote to increase reserve rebates. This is the best option for investors who believe increasing incentives for liquidity providers is the best way to expand the network.

The benefit of converting KNC to xKNC is that investors can stake and express a governance position simultaneously. Also, xKNC tokens automatically re-invest Ether trading fees into more KNC, compounding the interest.

According to the team's Medium post, xKNC tokens can be transferred between Ethereum wallets, added to liquidity pools, or used as collateral behind loans, just like the KNC from which they are derived.

Shortly after the xKNC token is launched, the team intends to create another token for the Synthetix (SNX) De-Fi project. Be sure to follow the xToken team's Twitter account for updates.