Exactly one month has passed since the start of Klondike Finance. From the very first day, hundreds of prospectors joined the Future-of-France goldrush and mined KLON. “And, how has it been so far?” — you might ask. Overall, much warmer than the local miners had it in the past.
In this article, we will recap the first month of Klondike protocol being live. We will also propose some ideas for the future steps. Put your shovels aside for a few minutes and read up!
- Stabilization Fund and Treasury are well capitalized
- Proposal to completely stop KLON inflation
- Proposal for new token economics with a boost
- Treasury spending and audit
- V2 coming up with product features
- DAO slowly taking over
- New rebase asset to be introduced
Treasury and Stabilization Fund are growing
The bootstrap stage has attracted a lot of interest to KLON token, which strengthened the kBTC-WBTC pool driving demand up. As such, there were plenty of positive rebases. A perpetual machine, one might say. BUT! Unlike regular Basis forks, Klondike protocol capitalized on the issuance in the form of “ape tax” aka Stabilization Fund.
As you remember, positive rebases are split in the following way:
As such, Stabilization Fund has now amassed almost $4,000,000 in WBTC and kBTC. We have been selling some kBTC within the stab fund to make sure the fund is capitalized well for negative rebases if and when they come. Meanwhile, KLON stakers in Boardroom have been enjoying up to 2,000% yearly APY, which is incredible! Check vfat for yourself.
There is also a Dune dashboard in progress to help integrators and community members track these things. If you want to add some things, please do it and we will upgrade it!
As for the treasury dev fund, it has also been growing. We have not utilized it at all so far — and have been using our time and resources on pure passion (it is much easier to work and develop when the community is so supportive!) All in all, this means we have some funds for further hiring or community grants. We are open to hear your ideas on this.
These numbers are beyond all our expectations!
And we have been working on exploding them even further…
The Force Awakens
KLON goes up -> more demand in kBTC-WBTC pool -> more rebases -> better APY for KLON stakers -> KLON goes up -> … this is a perpetual machine. Is that the eternal engine?
Not quite. You see, perpetual machines much like inflation — are directional strategies. They amplify the overall market or asset sentiment, in both directions. Stabilization Fund really differentiates Klondike from other rebase assets, but we want to improve that even further.
How? Fully kill the entire KLON inflation.
On March 8, as per how the code and the schedule work, the inflation was to be reduced. However, we would like to propose a full-stop to KLON inflation. As the contracts are now written in a way where it is not possible for us to do it, there would need to be a migration with a token swap. This would be fairly trivial, as YAM and DUCK have done so previously.
Won’t this dry up liquidity in WBTC-kBTC and KLON-WBTC?
Correct, this would detrimentally influence the liquidity. Therefore, we will be proposing a two-token model. First token would be a replica of KLON but without any inflation: a governance token which accrued positive rebases. So KLON but with capped supply.
The second token would be a boost token for the Boardroom like veCRV of Curve Finance. The idea is that you will be able to farm and/or buy this boost token to increase the boardroom rewards with a multiplier of 5x. This would eliminate inflationary selling pressure to KLON almost fully, while the demand for the boost token will also be there as it would give CRV-style boosts.
The clones have been defeated previously, in Star Wars. By who? JEDIs and DROIDs.
This proposal will be live for voting and then for implementation in the coming days. Imagine a new KLON with no inflation, but the one that keeps accruing rewards and can vote? Imagine all the positive rebases so far to Boardroom KLON stakers, but without KLON being inflated…
Next up, stabilization fund and treasury spending.
At the beginning of the article we mentioned that the treasury and the stabilization fund are very well capitalized. The spending of Treasury can go to new hiring, full UI revamp, grants, and of course the audit of V2 of Klondike protocol.
Next to that, there is an economic argument for not keeping the stab fund ratio up to 100%. After all, the original system as per Basis Cash was supposed to be supported by bonds, while in the Klondike model it’s bonds + stabilization fund. So here is the question: maybe a 60% or even 40% ratio is absolutely sufficient. This would open up new growth possibilities!
Speaking of V2 — it’s about to be completed in the coming weeks. We have some grand ideas to share with you all on how we envision the broader TAM for the product. This includes being able to trade(swap) assets without Impermanent Loss and Slippage. Stay tuned!
There is also a question of DAO slowly taking over as we don’t think it’s appropriate for an anonymous team to control such large amounts. Therefore, we would also like to hear your thoughts on how to best plan the migration and choose multisig signers.
And last but not least… We are long overdue for a new cool synthetic rebase asset to be introduced. What could it be? DOT? YFI? A stablecoin actually? Hm…
There is more in the works, but we hope these ideas already excite you! We are days and weeks away from these things going live — and V2 getting to the product stage. Please help us spread the word on Twitter and also reach out to protocols which can have genuine community-beneficial integrations.