Additional KNCs as Fuel for Kyber Growth

[tezoswakenbake]

You know who were the ones that also had the same idea as you? Communists.

They also thought the workers (lp’s), the proletariat, the work force, should be the ones that should be running the businesses, not owners, not investors.

The reality is that your arguments are full of envy, hatred and resentment, you can’t stand that investors are the bosses of Lp’s. Even tho we seeded KyberNetwork, you want us out of the way. So you are in favor of expropriation of KNC investors/hodlers rewards by changing token economics. And because you think it is unfair that we are taking profits out of LP’s rewards, in your communist view, you want investors to provide work force to be worthy of rewards or get nothing in return, pathetic.

[apisung]

And you freaking smelling white Caucasian who thought Capitalism and exploitation is the only way of of building economy…

You Blackmail communist as bad system but in actual sense capitalism is worst…

Exploitation of LPs in the benefits of KNC bag holders will never work on a Liquidity protocol such as Kyber…

The success of Kyber will depend on LPs not KNC bag holders nor KNC Stakers or Voters…

LPs of Kyber are the foundation of success…

KNC liquidity pool tokens should be Running Kyber Dao …

[tezoswakenbake]

White Caucasian? You have to ad hominem me with racial stuff? Blockchain communist, how exactly we are “exploiting them” if we seeded the platforms from which they can get their jobs? We seeded DMM which is 10x more capital efficient for them vs other platforms. Now after you get a nice place to sit your ass to work and earn money (which profits are also subsidized by KNC investors), you want to expropriate the founders and investors from their liquid ETH cash rewards? How full of envy, resentment and hate are you towards the people that gave you your job. You think it is correct to expropriate private property?

By DMM being 10x more capital efficient vs other platforms, then yes, there is space for profits to both investors and to LP’.s. Cut your hateful, resentment, envy based speech a little.

[Renko]

We ain’t exploiting anyone. Just stop dude. In any case, LP’s will exploit investors because we won’t be paid and on top of that we will print tokens for them!

[Cryptolawguy]

You serious dude? Are you a KNC holder or somebody else? This is a discussion for KNC holders. Those who will be voting on the proposal.

“No more rewards to KNC holders…” - Said no KNC holder ever!!!

Anyway I’m out. In these situations investors must vote with their feet. How many will follow?

Loi, I feel as though you could have better explained why this is necessary. Such a drastic action, that negatively impacts KNC holders and positively impacts liquidity providers, and there doesn’t seem to be any mention of why such a drastic move is necessary. Maybe some other less drastic action would have sufficed?

You say “bootstrap liquidity” … but minting new KNC (which will last forever) to achieve an end result faster than would occur naturally makes little to no sense. Market forces will naturally attract LPs, as a better product for them is a better product for them. ***

Further, you’re asking KNC holders to do this without any expectation of receiving a fee from the DMM. So, remind me, why would any KNC holder in their right mind vote in favor of your proposal? … !!!

Nonetheless, this proposal will obviously be approved because the decision has already been made. This discussion is more of a formality, and its a good formality but we all know it will have no affect on the end result.

And here I am now holding a seemingly worthless bag of KNC. I will vote with my feet, and buy MKR, or ETH. Would MKR ever suggest minting 20% more MKR to incentivize borrowing? Of course not. Would any rational tokenholder vote to dilute their interest by 20% to “bootstrap liquidity” in the short term? Probably not but I obviously know very little so my opinion must be worth even less.

Anyway, I’m no expert. And all of you are definitely much smarter than me and more knowledgable about crypto than I am. I’m a self proclaimed value investor and have always told everyone to buy KNC because it was a great value investment. I don’t know what it is anymore. The return is terrible already, and this is only going to make it worse.

Anyway the fault is mine, I put too much faith in KNC as an investment. Now I read people saying KNC holders shouldn’t get any reward and am certain we have come a long way from the ICO.

Am a salty? Yes. Am I ill informed and delusional? Probably. Am I still going to be KNC holder tomorrow? Probably not.

Peace Out Kyber

[tezoswakenbake]

Finally, someone who knows what is saying. 90% agree with your post. And, yes you are right, this is a formality. The only thing that I do not agree with you is the part that we need just natural market forces, since ALL our competitors as subsidizing LP’s with inflation, we can’t compete, so we have to subsidize the LP’s artificially too. But to counter that subsidization we need to charge a fee in DMM platform that goes to KyberDAO, that will give us back what investors are losing through inflation subsidization.

But, what Kyber Team is telling us, is that THEY will not add fees on TOP of DMM at the beginning for an indefinite amount of time, until this adoption is “bootstrapped” when would that be, could be for a year or two or who knows when… they are telling us, to accept self-sacrifice for an indefinite amount of time, which is totally unacceptable.

I say that we must not wait for adding fees on TOP of DMM, we should get ETH rewards KyberDAO at least what we are losing through inflation subsidization, AT LEAST to break even, not even to profit, only break even, but the team think is okay for us to actually lose for an indefinite amount of time, they think we are going to be like, oh yeah go ahead, as investors we love to lose value for an indefinite amount of time, no problem!

And yes, this is a formality, at the end of the day, they will do whatever they want, and this discussion is a waste of time, they will not understand the objectivity of why doing this is WRONG, is immoral, is sacrificing your investors, is unacceptable. Put the damn fees to break even AT LEAST since the start of DMM, don’t tell us to wait for an indefinite amount of time.

If this thing is not fixed, the day of tomorrow, I’m probably not going to be a Hodler either. I ain’t going to accept to lose, to sacrifice myself for an altruistic purpose. And yes, I’m salty as well, how you think I’m going to be if they tell you that you need to accept losing for an altruistic purpose? Jumping out of happiness? And there is also a big issue with proxies, basically we have an open door for collusion, which they are also taking lightly.

I’m contacting Matt Gorham of Pantera Capitals, I know him and he listens to reasons. Perhaps they can pressure Kyber Team to abandon their altruistic self-destructing behavior towards thier investors.

[Cryptolawguy]

Ok so LPs need to be subsidized, but why not subsidize LPs with a % of the fee earned by the protocol, similar to the current situation with KyberDAO? Why do we feel the need to issue 20% more KNC solely for LPs? This can’t be undone!!! My guess is that big time KNC holders are going to benefit from this the most. That’s the only way this going through makes sense to me. I’m willing to hear why it is “utterly important” but I haven’t heard it yet. My guess is it may benefit Kyber in terms of volume and liquidity, but but at what cost to KNC holders? KNC holders are the losers. LPs are the winners. What’s funny is KNC holders are the ones who are going to vote in favor of it! That’s ok, everyone is on the same page except me I guess so I’ll kindly see myself out.

If you build it they will come.

[tezoswakenbake]

They need to be subsidized with inflation, the thing is that we are subsidizing the LP’s of our competitors with OUR inflation, and competitors are extracting liquidity from DMM for free, and we are not even charging them a fee for doing so. Because Kyber Team wants to run DMM altruistically for “bootstrapping adoption”. Competitors even provide subsidizes as well to DMM to be able to extract liquidity from it or the pay a fee that goes to KyberDAO (on top of the fee they will pay to LP’s), but we must not subsidize for free the liquidity pools from which our competitors will extract liquidity for their platforms. Kyber team wants us to accept losing for an indefinite amount of time, the most objective thing, is to charge our competitors a fee that will offset the amount of value KNC holders will lose through inflation, to break even, and do this from the start of DMM.

What is that thing of letting our competitors abuse us for an indefinite amount of time? Adoption can be bootstrapped from a break even position for KNC holders, not necessarily from a losing position. Ah no, but Kyber Team wants us to accept losing value for an indefinite amount of time, and to help our competitors. Why our competitors even will want to subsidize their own liquidity pools, if they have DMM doing it for them for free? If I were them, I would stop sacrificing my token holders by printing tokens because DMM is doing it for me for free. Pure altruism.

And at the end of the day, people like you and me, that does not agree, we will just sell, and the “governance” of kyber will be only for people that think the same, all proposals will have 99% acceptance, because everyone that think differently sold.

[Cryptolawguy]

Ok so you want to mint 42M KNC to incentivize liquidity to the new DMM. The new DMM will not charge a fee for the KyberDAO, initially. Obviously that is coming next, right?? Will it offset the 20% loss every current KNC holder will experience?

Why not charge a fee for the DMM service and reward LPs with a percentage of the fee similar to the current situation with KyberDAO? It it because that incentive is not enough to attract the necessary liquidity for the DMM to work? We’re not all as knowledgeable as you Loi, but we want to learn.

Also, how will the DMM affect current fees and rewards being earned by the KyberDAO? Are we printing 42M KNC to incentivize liquidity for the DMM at the expense of less volume for Kyber’s DEX? Is it safe to assume that volume of Kyber DEX and fees and rewards earned by KyberDAO are going to be cannibalized by the DMM volume?

[tezoswakenbake]

@loiluu

|KNC-ETH|1.9|To enhance KNC liquidity and encourage KNC holders to lock up their tokens for a prolonged period, we propose that liquidity incentives be awarded to an amplified KNC-ETH pool. This also acts as a natural counter against inflationary pressure.

I ain’t going to work my ass like LP’s in KNC-ETH pool to offset inflation and be vulnerable to risks like impermanent loss. They either charge that fee that must go to KyberDAO to offset from the very beginning, or I sell.

Imagine telling your investors that just want to receive dividends, no, you have to work now, to avoid losing value of what is being minted for altruistic purposes.

[Cryptolawguy]

Oh you bought KNC to stake and receive rewards from fees? Forget about all that, unstake your kyber because we ain’t giving you a fee, and provide liquidity instead! What???

Oh and y’all remember Kyberswap, the exchange from which you were receiving your rewards? That liquidity and volume is going to migrate to the DMM. Happy hodling! (right? wrong? let me know!)

[tezoswakenbake]

And like I said, at the end of the day we sell, and the ones who buy our tokens will also sell if they don’t like it, until its only full of people that think altruistically like you, all your proposals will be voted with a quorum of 100%!! The protocol will be yours! Is that what you guys want? Then governance is BS. Honestly. This is communism within blockchain.

Loi says,

the motivation is to “bring more DeFi participants and value into the Kyber ecosystem: More liquidity providers using amplified pools would mean more of them receiving KNC rewards and becoming part of the Kyber ecosystem and community, with the ability to stake KNC and vote on the KyberDAO. By receiving KNC, liquidity providers not only gain a useful asset, but also a stake in DeFi’s liquidity infrastructure.

Why do KNC holders care about this? You mean to say more LPs would mean even less rewards for us? So stupid, and they say it like if it was something good. Is not, then make a second token that is not meant for voting nor exacting dividends from KyberDAO. And use that second token to subsidize liquidity providers, NOT KNC, and print that second token as much as you want

[Renko]

After reading all this, i probably will not stay either to see how this socialism experiment plays out, i probably will have to sell too and turn the page, look for other projects that actually want to create value for its token holders.

[tezoswakenbake]

Yes, all is being done in a way that we, investors, are sacrificed in the name of the “common good”. I’m done. And it is not like my opinion will change anything, it may influence a few people (to sell like me), but, this was already decided and won’t change, this forum is just a formality like Cryptolawguy says.

[loiluu]

I originally thought we needed to bootstrap the liquidity first before we could enforce some certain fee collecting back to the DAO. But reading your thoughts and also a lot other comments here i started seeing why it’s important to make the incentive aligned for existing KNC holders. There should certainly be some immediate and explicit mechanism to make DMM contribute back to the DAO, either via fee or other way. Please suggest more ideas, this is why we launched this forum so the whole community can work together for a better Kyber.

[tezoswakenbake]

Objective Idea 1: Make another token with another use case specifically to subsidize LP’s DMM. DO NOT give the investor’s tokens to LP’s, even less from our monetary emission (inflation). Le’ts separate our tokens, please don’t mix us with them (LP’s). We should have separate use cases, our use case (investor token) is to vote intelligently to increase and to receive ETH liquid CASH rewards. LP’s token should have another use case.

idea 2: Since our token (the investor token) already has the flexibility to print more, use the flexibility to mint new tokens to reward DIRECT VOTERS, to “FIX” the issue with proxies, which is the DAO part that is vulnerable to collusion! While we can, someday, find a way to collateralize proxies to avoid collusion. Which you said it was not possible at the moment.

idea 3: Never allow any kind of altruist idea to proliferate specially with investors tokens, For us, is all the same, is about sacrificing us either for the “common good” or to “bootstrap adoption” or “for the king” or “for god” is all the same, is about sacrificing the individual investor for a “greater purpose” and this is unacceptable.

[tezoswakenbake]

Idea one 1 I consider it important @loiluu

There could be a different token that is not the same as investors token (KNC) that should be used to subsidize LP’s, this second token should have a specific use case that should drive demand for it, although I have no idea what that use case could be? Do you have any in mind @loiluu? Honestly I really can’t think of a use case. My idea is that investors tokens should not be printed excessively and given to LP’s, because it will dilute our ETH KyberDAO rewards greatly, also, another thing you haven’t considered, is that all those LP’s paid with KNC, will use proxies, further increasing Proxies voting power over the DAO. I would prefer to make a second token, with another use case, to subsidize LP’s. And leave KNC minting flexibility to reward direct voters instead, to lower proxies influence over the DAO.

immediate and explicit mechanism to make DMM contribute back to the DAO, either via fee or other way.

Just keep in mind that, this immediate and explicit mechanism should reward KNC holders and will have to offset the drawbacks of:

A: KNC dilution of value to inflation minting.

B: Dilution of ETH KyberDAO rewards.

If we could make instead a separated token to subsidize LP’s with another use case that would drive demand, it would be much better, since A and B will no longer be a problem for KNC investors.

[tomaave]

I agree 100% with the motivations @loiluu stated. liquidity mining is an urgent and necessary step for the dmm to be successful and to bring more users to the knc community. It should be started soon while the market remains bullish! anyone that says otherwise is not thinking in the best interest of kyber only themselves or don’t understand the current crypto climate.

Tldr my feedback

• Burning extra knc is good but you need to lock up most of the extra knc minted until it needs to be used and make it easy for people to stake knc in the DAO or dmm for rewards
• Reduce voting gas costs asap so it is easy for more people will stake knc
• Knc pool for liquidity mining is good. LPs should be able to vote on the DAO too
• Tells us more about AMP and what kind of apy returns we can expect from liquidity mining
• Give some small trading fees back to the DAO and knc holders at the start. Slowly add more when more adoption happens

Some parts of the proposal isnt clear. Is this 20% forever or just for this year? Looks like kyber is following in the footsteps of Aave v2 with the difference being unused KNC tokens will be burned. Although Aave v2 minted more than 20% at one shot it is permanent and they are locking up most of the funds until they are required so the dilution effect isnt so strong. kyber should make sure to do the same and not have too much knc circulating. can we get a clearer idea or plan of why it makes sense to stake knc either in the DAO or dmm? And why selling or NOT staking knc is bad?

Aave also made it very easy for holders to quickly stake in the Aave safety module to get interest. There’s no need to vote to get interest. To follow Aave, kyber should remove the need to vote to earn fees. But if this can’t be done, you should look into reducing gas costs for voters! For a lot of voters’, rewards are being eaten up by gas fees and miners end up enjoying all the fees instead. this is obvious from the fall in the number of voters in the past months after we realised the fees are too much. Even this knc migration is taking up a lot of gas. Staking and voting has become very difficult and this alienates most knc holders and users.

Great idea to have a knc/eth pool is there for liquidity mining rewards! Knc Lps should be allowed to vote. Doesn’t make sense at all to leave them out of the community when they are your most important players. a user who is a voter and Lp is good no?

Can you share more details on the AMP? Why for usdc/usdt it can’t be higher like 200-300 since the price shouldn’t have much fluctuations? What is the expected apy returns if this liquidity mining proposal happens? Apy returns have to be much higher than other dexs for it to work.

I agree with some of the comments that with liquidity mining, the dmm can charge some extra fees to give to the DAO and knc holders? I think it can just be a small fee at the start as a sign of growth of the dmm when volume increases. If the DAO votes to let the dmm in and gives it free knc for liquidity mining, the DAO should get something in return, even if it’s a small fee at the start. This fee should be low enough that we still give better liquidity than uniswap and sushiswap. We also need to know when is a good time to add more fees to the dmm. knc holders need rough strategy on when we can expect a good return for our contribution to the DAO.

Liquidity on dmm is still very low now so liquidity mining is definitely urgent and needs to happen asap, like right away. The DAO sort of voted for it in KIP6 so you have big community support. the team should focus on increasing liquidity quickly and not be distracted by a few holders that just want a quick buck.

hope i made sense and thanks for continuing the great work @loiluu Kyber team! and when can we see more of the aave and kyber partnership?

[tomaave]

I totally agree with you on point 4 that knc Lps should be allowed to vote in the DAO right away. but dmm can charge a small fee first since knc liquidity mining will still provide good incentives (assuming apy is high).

[Tinamu]

I have already posted this before during earlier discussions in the KNC migration topic…

Basically all AMM today use the same model to incentivise usage => they issue an inflationary “governance” token and reward LP’s with that token. While this approach obviously works it does not incentivize people to actually USE the protocoll / liquidity pool (= to trade token A against token B).

I made up my mind and thought how can KNC incentivize not only the LP’s but also the normal user who trades AND keep inflation of KNC at bay at the same time?

This is my idea:

1.) X % of all rewards are issued to KNC “holders”
2.) X % of all rewards are burned
3.) A yearly inflation of X % is defined via DAO votes. This yearly inflation of KNC is issued to both “liquidity providers” AND “traders”. The exact split (e.g. 70% to LP’s and 30% to traders) is to be determined by a DAO vote.
4.) We could even offer a “bonus” to early movers = LP’s / traders who use the DMM during the first e.g. 3 months after a defined date (= a soft “vampire” marketing move). It might make sense to mint some KNC (= a few million KNC) ONCE exclusively for this to kickstart DMM.

Both “liquidity providers” and “traders” can claim their rewards in form of KNC as defined in point 3.) every two weeks - basically the same routine as normal KNC holders. They go to the DAO portal and “claim” their KNC.

This would be a setup which would incentivise all stakeholders (KNC holders, LP’s and traders) and which would allow the DAO to change and adapt the parameters very easily to keep the economy balanced (in respect to inflation). Under ideal circumstances the increased usage of the protocol (due to incentivised trading) will offset the inflation completely.

I think this solution might offer some significant benefits compared to a “one time” mint of e.g. 20% KNC.
1.) Most importantly - ALL stakeholders (KNC holders, LP’s AND TRADERS who bring the fees) benefit
2.) The model offers flexibility as all relevant parameters (reward ratios, burn & inflation rate) can easily be adjusted anytime by voting in the DAO. Check out the most recent PanCake Swap vote - they did exactly the same thing and it was a huge success.
3.) There will be an “endless” liquidity mining process this way - this should prevent “grass-hopping” by LP’s (= as soon as liquidity mining ends they switch to another protocol).

I would strongly prefer such a model and I am sure that it would work out great for KNC. It is basically a very similar system as AAVEs Ecosystem Reserve or the one used by PanCakeSwap BUT none of these actually incentivize TRADERS to use the platform - only token holders and LP’s. The incentivization of TRADERS would definitely be a unique selling point for KNC.

Looking forward to your feedback!