In the recent weeks, several community members have asked us why another token was built for KMX, instead of just using KUS. Our decision was motivated by two key factors. Firstly, the KMX protocol is structured to minimize inflation in its own economy, which renders it incompatible with KuSwap’s DEX and Farming sectors, but optimal in the context of leverage trading. Secondly, we have some extremely exciting plans in store for KUS.
Today, we unveil those plans.
The Ultimate Liquidity Solution for KCC
Many first-generation decentralized exchanges (DEXes), including KuSwap, faced challenges associated with the inflationary yield generated by farms. This was primarily due to insufficient fees earned by the exchange to offset the supply introduced to the economy through farming. Moreover, opportunities to collaborate with other projects were missed due to the absence of a permissionless way for projects to reward liquidity providers with their own tokens.
In the past year, we have witnessed the emergence of several solutions that have enabled us to expertly design the KUS economy by effectively aligning incentives. Consequently, will be able to offer independent projects a permissionless avenue to incentivize their users to provide liquidity on the KuSwap platform. This represents a significant step forward in the evolution of our ecosystem, and we are excited to leverage this new approach to drive growth and value.
Upgrading KuSwap to KuSwap v3 (same ticker)
To bring about these remarkable enhancements to KuSwap, we will be transitioning to the cutting-edge KuSwap AMM v3 protocol, while maintaining the familiar KUS ticker. For a seamless experience, KUS holders will have a dedicated allocation to swap into the new token. Additionally, we’re excited to announce airdrops for KUSGOV, KUSFOX NFT, and KUSFOXES NFT holders, as a token of appreciation for their continued support.
Alignment of Incentives and Real Yield
With the new KuSwap protocol. Incentives will be better aligned towards:
- Liquidity Providers who will earn KUS and
- Governance Token Holders who will earn fees from the exchange, as well as bribes and other forms of real yield.
What do these all mean?
What it means for KUS Stakers
Upon implementation of the new protocol, KUS governance holders will be able to earn real yield from the exchange through the following:
- Fees from token swaps
- Bribes offered by protocols, projects and community DAOs
- Project Launches
Furthermore, the new KuSwap protocol incentivizes active participation of users in the governance of KUS. Governance token holders will be able to earn fees and bribes on the pairs that they have voted for.
What it means for Liquidity Providers
Liquidity providers will still be able to get KUS by providing liquidity on the platform. However, the new KuSwap protocol will automatically allocate emissions to a given pair, based on the votes received by that pair in governance. This aligns the incentives to the pairs that KuSwappers and KCC users are ACTUALLY using and therefore emissions are not wasted on pairs that are rarely used for swapping.
What it means for Projects in the KCC Ecosystem
The new KuSwap protocol presents an opportunity for projects in the KCC ecosystem to increase their exposure and reach a wider audience. By offering bribes as incentives to KUS governance holders, projects can incentivize them to vote for their token pair on the KuSwap platform, thereby increasing the emissions to their liquidity pair, and incentivizing liquidity provision.
This feature also adds to the marketability of KuSwap for project launches and collaborations with other KCC protocols and DAOs.
Overall, the implementation of the new KuSwap protocol presents a number of benefits for KUS stakers, liquidity providers, and projects in the KCC ecosystem. It provides opportunities for real yield generation, incentivizes active participation in governance, and aligns emissions with the pairs that are actually being used on the platform, making KuSwap very efficient and attractive to new investors, projects, users and traders.
More details and documents will be published concerning timelines, emissions, governance for this protocol and the migration scheduled for Q2 2023.