Recommendations for Kintsugi's DeFi-Hub Launch

1yr ago
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  1. Which protocols support LKSM, wstKSM, vKSM and sKSM, on which chains are there? Are the teams known and trusted?
  2. Why are you suggesting to pair KINT with MOVR? It would seem more natural to pair it with KSM, since one obvious use case is reinvesting KINT rewards
  3. What is the mechanism by which the reward tokens are paid out in the LPs? Often there is a fixed amount per day, which gives insane yields in the early hours but quickly drops after a few days.
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To be honest, I guess that you know better than me, I'm just wanna wish you the best. Working hard! Moving forward!!!

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personally, I'd swap the KINT-MOVR pool for KINT-KSM because that's the pair that vaults will use for cycling rewards (disclaimer: I'm a vault operator). Otherwise everything else looks good.

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@a3cF...AjJw

  1. Which protocols support LKSM, wstKSM, vKSM and sKSM, on which chains are there?
    -> LKSM: Acala team on Karura, wstKSM: Lido team via Moonriver, vKSM Bifrost team on Bifrost, sKSM Parallel team on Heiko.
    Although individual perception might differ, we assessed all projects and their respective LSD tokens as trustworthy. Also it should be emphasized that the risk of failure of one of the protocols would not impact the safety of Kintsugi or kBTC but would remain with the holders (LPs) of those tokens. Only when those LSDs are whitelisted as collateral to mind kBTC or in the lending protocol would the protocol be at risk in case of a failure.

  2. As I already stated in the post, swapping KINT for KSM does not require a KINT/KSM pool but can be easily done via multi-hop swaps without impacting the UX. Hence, I suggest we should focus the discussion more on potential LPs of pools rather than on order flow, to attract as much capital as possible to minimize slippage. Some arguments I see in favor of KINT/MOVR pool is that (a) Potential IL for KINT/MOVR is likely lower and (b) with KSM LPs face the choice to stake for ~20% APR with no IL risk. This means that the APR needs to be somewhat higher compared to when paring KINT with MOVR which is probably hard to sustain without incentives.

  3. The rewards are paid out on a per block basis with a fixed amount per block. This means what you described will also the case on our DEX. We have seen that this does actually attract more capital in a shorter time than starting with a low APR and increasing it over time. This strategy failed miserably on Arthswap for INTR/DOT and iBTC/DOT.

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Great detail. Thanks team. Couple points:

  1. I also think the KSM/KINT pool would be better to attract liquidity vs KSM/MOVR. I noted the point about stakers of KSM getting 20% and no IL but that is also the same for MOVR stakers give or take a couple of %. Given the nature of the user base of Kintusigi, i think KSM pair is much more appealing and would be able to achieve the target TVL quicker especially given the APY.

  2. For the borrowing and lending I am assuming that any collateral can be used to borrow any asset? I think the Max TVL vs liq TVL are good and USDT doesn't need to be changed to protect the user I think putting the risk management in the hands of the users is better.

  3. 'To build up a reserve fund to cover bad debt, 20% of the liquidated amount will go to the treasury's ‘bad weather fund’ - Not quite following this? Where does this 20% come from? If the liquidator is taking 50% [+ premium] of the position is this 20% coming from the other 50%? In which case that's a large cost to be liquidated? 10% to the liquidator and 20% to the treasury?

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@a3eJ...o5NA
Thanks for your input.

Re 3.: The liquidator can at max close 50% of the borrowers position. For the closed amount, the liquidator will receive 110% of the debt value in the form of collateral, which implies a 10% premium. The 20% which go to the DAO for a 'bad weather fund' are in relation to the 20% premium, such that the liquidator will effectively get 108% of the closed debt value and the DAO get's 2%.

We are already looking into smaller or dynamic closing factors, to avoid unnecessary costs for the borrower.

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Excited

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NOTE: The above post has been edited to update the suggestions for the pools and lending markets for the launch, in order to reduce scope and ensure a timely shipping of the DeFi Hub.

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