Who should the users trust?
The users are not required to trust anyone because the protocol does not hold their funds (only when a trade is being executed). Additionally, being entirely on-chain allows users to freely verify and audit the smart contracts. For added security, a multisig wallet is used for executing admin actions. Users can also specify a minimum conversion rate to prevent a trade from executing in the event slippage causes the conversion rate of a trading pair to fall below the minimum rate specified.
Who should the reserves trust?
The reserves are required to trust the Kyber Network administrators. While reserves' funds are not at risk, Kyber Network operators have the ability to halt a reserve's operations within the platform. In addition, the reserve managers should be aware that their reserves could be affected by extreme market conditions like flash crashes or from sub-optimal inventory management (e.g. setting wrong prices or from large exposure to risky tokens).