What is the argument against using the “burn” funds rather than printing more tokens to get capitol? I just don’t see why printing more KNC would be better than just using the “burn” funds. Maybe I’m missing something? You could avoid the bad stigma of “printing tokens” and still generate the needed capital. Instead of printing more tokens you just don’t burn any. At the end of the day its basically the same thing but I think the stigma is worse when printing compared to just not burning any and using those funds for growth instead.
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just want to say, before, we were a store of value token, now we are going to be like all those protocols that earnings will need to be converted to ETH as their store of value, like is happening right now, sad. Just Imagine, i was converting all my earnings of KyberDAO from ETH to KNC because of its store of value properties. Now i will have to do the opposite due to the new approach, this is really sad. We will have these series of bubbles from now on.
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인플레이션 제안은 기존 홀더를 떠나 보내는 일이 될 수도 있습니다.
상당히 우려스럽습니다.
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인플레이션 제안은 기존 홀더를 떠나 보내는 일이 될 수도 있습니다.
상당히 우려스럽습니다.
Translation:
Inflation proposals can also be sending away existing holders.
I am quite concerned.
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This is exciting, would love to hear more comments from other people regarding this topic. I think the community will benefit from reading all the thoughts here before casting their vote on KyberDao.
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I 'm an investor in kybernetwork , so i have to share my thoughts here :
First , to counter the dynamic supply argument , we can look at BTC ( 21 mils supply -fixed ) and BNB ( 170 mils supply - its actually was 200 mils -fixed but they burned alot )
Second , although Loi Luu and the team intention is probably good . History had shown that with an “elastic” currency eventually it will get abuse , because the temptation is simply too great ( look at what happening with the US dollar ) . That’s precisely the reason Bitcoin was created , Satoshi was fed up with the printing of the Fed to bail out the big companies .
Third , whatever happen , i will still support kybernetwork and the team going forward . I believe the team is bright and have good intention at heart . Even if we disagree at some proposals , we all have a common goal of making kybernetwork growth .
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I just wanted to say that LM brings a huge amount of liquidity to Uniswap, SushiSwap and other Dexes. Before the Defi summer and the LM trend, Kyber was on par with Uniswap in terms of Volume and number of users. Now we definitely need a boost to get back the market share from not only Uniswap but also many new players.
I think one misconception/ misunderstanding you might have is that we will issue new token anyway. This is not true, In fact we cant do that, and dont plan to docut. Its really up to the DAO to decide whether its appropriate to mint new tokens, how much and when. Its not really our sole decision and our team might not benefit from the new tokens. We believe that the DAO, with sufficient participation from the community, will make the best suitable/ well-informed decision to help Kyber grow in general.
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I would like a response about what i said, all these protocols all face the same issue of etheruem being too gas costly.
You say inflation to LP’s will bring liquidity which will be beneficial, this is logical, because inflation is giving LP’s good profitability, but also is logical is at expense of token holders. I understand the amount of ETH kyberDAO is receiving thru KYBERDEX is not profitable enough for LP’s right now, but it is for other protocols because of inflation gives high profits to LP’s. But these LP’s receive the inflation tokens, which i’m sure a lot of them dump it to get liquid ETH, the other that do not dump, will hodl it until one day it bubbles and they all sell.
But our model doesn’t need to change, if we can move KyberDEX into a second layer solution, and make KyberDEX super gas efficient and cheap, we will attract all those users, which will bring massive ETH to KyberDAO, which ultimately will pay LP’s great profitability and in LIQUID ETH instead of illiquid inflation tokens, which in turn will bring as well huge liquidity, WITHOUT having to use any inflation.
ETH 2.0 might be YEARS away. My question is, why focusing in bringing liquidity right now with inflation, and NOT focusing in getting KyberDEX on second layers solutions like Matic or any other. At the end of the day, LP’s will bring liquidity if you make the enviroment profitable enough for them 
no matter if is through illiquid token inflation or liquid ETH.
The thing is that inflation based funding is always abused, doesn’t mean because is “descentralized” it will not be abused and we all going to make rational decisions. There are even voting proxies right now with a lot of voting power that are holding the voting weight of many KNC holders, these proxies are easy targets to collude with and possible attack vectors for committing voting fraud.
I’m really skeptical and to be honest, quite concerned as well.
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I think one misconception/ misunderstanding You might have is that You will NOT issue new token anyway. Binance holds 20 million KNC, many pools hold 100.000s… They make profit from voting regardless of the number of max suply and number of staked KNC in DAO… They WILL support whatever is thrown for voting, they don’t care about fact that 90% of small holders revenue will go down…
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I think the dynamic supply needs to be voted on as an separate and independent point since it is likely the users will not like this point and in case it is voted as a part of a bigger proposal, there is a risk of reputation damage to KNC in case the vote is no.
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i dont think the treasury is for the team - it is for the DAO to decide if they want to invest in either funding new protocols or embarking in new growth initiatives.
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The real new growth initiative that won’t require liquidity mining with printed tokens would be move kyberDEX to 2nd layer solution, cheap transactions will attract a lot of costumers, costumers will pay ETH fees big time, liquidity miners will earn in LIQUID ETH instead of printed tokens. I don’t know why is so hard to understand this point…
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The main determinant here seems to be the safeguards and voting process that will ensure that the kyberdao will be responsible. It is important to remember that the team does not decide, the DAO does.
in the meantime, i think the main discussion needs to be around safeguards:
- no infinite minting
- every new minting is new dao vote
- long timelocks / quorums / vote differential
these should ensure the base security of the token, as well as ensure a serious discussion for any minting event by the DAO.
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Does any of what i said make sense to anyone? The TEAM won’t print tokens, it will be the DAO. This point is already understood. But all of this printing is NOT needed.
The solution i’m proposing, doesn’t require anyone to print tokens, not the TEAM, nor the DAO, nor anyone. Just to move KYBERDEX to a second layer solution to get ETH from possible millions of traders that want cheap transactions, liquidity mining will mine LIQUID ETH instead of inflation based printed illiquid tokens. Liquidity miners will prefer to get paid in liquid currency ANYWAYS. This will also lead to an increase of liquidity provided by liquidity miners or LP’s, without having to inflate KNC.
Guys, liquidity miners prefer to get paid in liquid currency, they are attracted to profitability nothing more, and we all want profitability paid in liquid currency, not just us the voters, also the LP’s.
You guys are introducing socialism-keynesianism economics into the ecosystem, a few posts ago, you guys not only wanted to pay LP’s with printed KNC, but also give free KNC to traders. Nothing is free, neither the profitability of the LP’s, nor the act of giving free KNC to traders, this is always at expense of someone else.
Stop trying to fix things with solutions that doesn’t attack the root of the problem, which is high gas costs, move KYBERDEX to a second layer solution, become the first DEX operating in a second layer solution, giving the service of very cheap transactions to traders, which are the ones that PAY ALL OF US, Voters and LP’s. To get that JUICY ETH from them.
Once we have all those costumers, will attract liquidity, because LP’s are attracted to high ROI paid in liquid currency. Then with all that ETH going to kyberDAO, we can make some inclusion strategies, VOLUNTARY inclusion strategies, for example, you guys want LP’s to own KNC, to “include them into the ecosystem” fine, but make this totally voluntary, don’t force them out of their liquid ETH rewards, when LP’s want to retrieve their ETH, the protocol VOLUNTARILY can offer them to be paid in KNC instead, or 50/50%. This KNC will be bought with KYBERDAO ETH or used from the KNC we use for burning.
You want to include traders, FINE, we can offer them, every time they trade a 2% “cashback” similar to credit cards, in KNC, converted from the ETH THEY pay.
All these non-inflationary solutions requiere we move KyberDEX to 2nd layer to attract all those traders.
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I have another suggestion , the current voting system is actually hindering the growth of the network . Since its too expensive to vote , only on a trivial matter that eat on profits of the holders that’s staking . And if i remember correctly , it’s the same option A that was picked every single time .
So i think we should just discard this current system and give passive income to those that stake , only using the vote power on the most important problem .
Which bring another point , the voting for new listing . I think this is another mistake , one of the reason Uniswap surpass us is that they allowed anyone to listing any coin . Let the free market do its thing instead of trying to control it . The more you try to control the market , the less attractive your network is to everyone else .
Another thing i dislike about using Kyberswap , you have to use your email to create an account in order to using limit order tab . Why cant we just logged in with our metamask and instanly do the trading . That’s another reason why adoption is low in my opinion .
And my final point , is the fee . If you want to attract user , you have to have lower or atleast equal fee compare to your competitors . Thats how Binance got their business going , and how Uniswap came to dominant last summer . Going forward , i believe the same will be apply . I hope the team can somehow figure this out , i really am .
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The gas fees for decentralized exchanges as well as on-chain DAOs for Ethereum are expensive, this is across the board, but this is comparing apples to oranges here to say that Kyber Network can avoid allowing the DAO to mint tokens under specific guidelines and using them to grow the protocol for years to come if we use a L2 now because gas fees are bad.
I get where you are coming from, 100%, but this proposal is thinking of the long term, and in addition I don’t think you or I can confidently say that adding a L2 right now would grow the protocol just as much or more as allowing a proposal like this, personally speaking I know the Kyber team would know better than I
There are other implications you have to think of, 1 being trust. A lot of L2 solutions or otherwise will have a trust compromise in some sense. And even in the case of a trustless L2, there are other hurdles like getting the user-base onto that L2 and using it, how to direct and connect their wallet to it, etc. - these are all things Kyber and any other DApp on Ethereum have to think about when moving to an L2, as lowering the fees outright sounds great but when you add in the other hurdles, it raises other questions like: is it a good long term solution for the protocol, or a bandaid? and will the hurdles users have to go through to use the L2 possibly change how much usage it really gets? lastly that comes to mind, is with liquidity. If liquidity is split between L1 and an L2, then it’s way less on both. If you focus completely on L2, then there’s less L1, and majority of the interest in volume is on L1 currently.
L2 would likely come with way less trading volume (you can see this in current L2 exchanges) too, which would lead to less ETH fees earned for the DAO.
I think L2 is something that should definitely be researched as the team has mentioned they’re doing, but L2 in my opinion is completely unrelated to what’s proposed above for the reasons I mentioned.
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Nonsense, https://perp.exchange/ this DEX already surpassed KYBER DEX volume, and they builded their DEX on xdai Second layer solution. 0 GAS fees.
Your security/liquidity concerns doesn’t apply to the reality with this exchange.
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So perp.exchange is for perpetuals, and it is not similar to Kyber, they are much different projects. Not to mention, Kyber has 10’s of thousands of users, perp only a small small fraction of that. Getting 10’s of thousands of users to switch over to L2 is much different than starting a new project on L2 from the getgo as perp has.
Volume comparisons from an L2 to an L1 are also sort of pointless due to the ease of wash trading on L2, not accusing perp of doing so but it’s not something that should be ignored.
At the end of the day, you seem very certain you know that L2 is the ultimate solution for Kyber so I won’t continue to debate it here with you. That said, I would strongly disagree with your points. I think L2 is short-sighted if the plan is to try to rush into an L2, though something to definitely consider, but should have no change on how this proposal is perceived. L2 is a scaling solution. This proposal has absolutely nothing to do with scaling, but rather growing Kyber and preparing for the future. This isn’t the place to make assumptions here. Both this proposal and a L2 could grow Kyber linearly. But when the future of Kyber depends on changes like this, I would be hesitant to assume an L2 will be the magic wand.
You make a lot of assumptions (L2 will bring enough fees to fund for the future, all LPs will just want to dump KNC, suggest focus should be KyberDEX, which is KyberSwap* and a separate team, this team IS focusing on L2, funding is always abused, the list goes on) as fact in this thread as well which isn’t beneficial to the outside reader, so I’d encourage you raise reasonings with your assumptions as to why L2 is the ultimate solution for Kyber’s future growth. I would also like to hear your argument against my points if you are advocating for L2s, in regards to the hurdle of switching users to L2. Do you have numbers on the conversion rate from L1 → L2? Any thoughts on the split liquidity since Kyber is a liquidity protocol? Do we keep the liquidity all on L2? Split it between both? As well as a few other I’ve raised.
Thanks!
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Since its too expensive to vote , only on a trivial matter that eat on profits of the holders that’s staking . And if i remember correctly , it’s the same option A that was picked every single time .
This is something staking pools currently address. You can stake and earn regular fees as you normally would from the protocol without paying any gas to vote. However, gas solutions and L2s is something the team has stated they are researching as well, so in the future there should be solutions that also allow you to keep your voting power in addition to having low voting costs.
Let the free market do its thing instead of trying to control it . The more you try to control the market , the less attractive your network is to everyone else .
100% agree! This is where Kyber 3.0 comes in, as it will support permissionless liquidity exactly like Uniswap and others, where anyone can bring assets and provide them as liquidity.
Another thing i dislike about using Kyberswap , you have to use your email to create an account in order to using limit order tab .
I can see why you’d dislike that, however it’s important to keep in mind this is KyberSwap which is completely separate from Kyber Network. The account creation is a feature unique to KyberSwap the service, not Kyber Network the protocol which is a much bigger picture.
If you want to attract user , you have to have lower or atleast equal fee compare to your competitors .
Fee is also important, agree! Kyber actually has a much less fee than Uniswap (currently only 0.1%) - however the gas fee is usually what becomes costly. This is something the team is aware of and again is addressed with Kyber 3.0, as there will be gas improvements and as mentioned previously, L2’s are also being researched in addition optimizing the contracts for gas improvements (which will have a big impact).
Cheers!
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You make a lot of assumptions (L2 will bring enough fees to fund for the future, all LPs will just want to dump KNC, suggest focus should be KyberDEX, which is KyberSwap* and a separate team, this team IS focusing on L2, funding is always abused, the list goes on)
L2 will bring enough fees to fund for the future
This is logical, cheap gas will attract more costumers, unless you are against the common sense. Also, how hard is to start trading in L2? You can use metamask to login, as simple as that.
LPs will just want to dump KNC
No, i don’t make that assumption only, i also assume they will use their KNC to stake it too, which will result in ETH dilution in KyberDAO. Is very innocent of you thinking they will just HODL without doing nothing. And when they find out, that is too gast costly to stake and vote to receive rewards, they will SELL IT as soon as they earn it, THIS ANOTHER reason why we need to be in a 2nd layers solution, instead of inflation based funding tactics dressed as “to include them at the ecosystem” which will only hurt true KNC Token holders by dilution, If they find it profitable to stake even with all the gas costs, they will stake it, if they find out is not profitable to stake it on KYBERDAO, they will sell it as soon as they earn it. You can’t escape from this reality.
suggest focus should be KyberDEX, which is KyberSwap
Okey, sorry, KyberSwap. Still this doesn’t disqualify my arguments and rationalities.
funding is always abused
History has shown multiple times this is true. I don’t know what else to tell you, governance is governed by humans, and they always abuse it.
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