Kine Protocol AMA Highlights: A Conversation with BTSE on July 22, 2021
On July 22, 2021, Lei Wang, founder and CEO of Kine Protocol, joined the BTSE Exchange Telegram chat for an AMA.
Kine is a decentralized protocol that establishes general-purpose liquidity pools backed by a customizable portfolio of digital assets. The liquidity pool allows traders to open and close derivatives positions according to trusted price feeds, avoiding the need for counterparties. Kine lifts the restriction on existing peer-to-pool (aka peer-to-contract) trading protocols by expanding the collateral space to any Ethereum-based assets and allowing third-party liquidation.
Kine’s official partnership with Polygon (MATIC) will begin in August. In addition, the project will roll out stock index trading on their decentralized exchange in the same month.
Here are the highlights of the AMA in case you missed it.
• • •
Introductions
BTSE Moderator:
First things first, let’s go over introductions. Please introduce yourself and the Kine Protocol team.
Lei Wang:
I am the founder and CEO of Kine Protocol. Before this, I was in charge of Huobi’s institutional business, and prior to that, I worked in several investment banks heading derivatives trading technology in London and Singapore.
Our team is full of engineers who love trading. Many are excellent traders and have been in the derivatives business for years. Prior to crypto, our team spent the past five years working at major investment banks like Merrill Lynch, HSBC, and Citi. We are excited to bring our deep expertise across traditional finance and the crypto-native centralized trading platforms to the world of DeFi. We’re a very close team, and we have a lot of respect for each other. We never say no to new ideas, which means we will never stop innovating.
• • •
Kine Protocol Overview
BTSE Moderator:
Let’s talk about your mission with Kine Protocol. What is the main problem that the core team is targeting to solve?
Lei Wang:
First, during our crypto derivative trading on DeFi, we weren’t satisfied with the current trading environment. We identified many issues affecting our trading experience: lack of liquidity, low leverage, slow execution, high gas fees with cross margin support, latency, and asset security. Most of the pioneer solutions are not usable since they cannot solve the fundamental problem of liquidity, high gas fees, and latency. So, we set a goal to build a DeFi derivative market that offers users all of the benefits of DeFi and ensures that its user experience is compatible with DeFi solutions.
After three months of running on ETH and BSC, I think I can proudly say we have achieved this basic goal, and it’s time to make new breakthroughs.
• • •
BTSE Moderator:
How has your team worked to solve those problems?
Lei Wang:
Kine is a DeFi protocol that allows you to trade derivatives in a fast, transparent, and effortless way on Ethereum and Binance Smart Chain. It offers unlimited liquidity, up to 100x leverage, immediate execution, zero slippage, zero gas fees with cross margin support, and extremely low latency with high throughput comparable with any DeFi derivative markets.
Like any DeFi protocol, user assets are staked on-chain, not custody in any third party, which means users can enjoy DeFi levels of asset security, transparency, and anonymity.
As AMM is not suitable for derivative trading due to the lower prices than the market, we adapted a peer-to-pool liquidity model as a solution. The second major problem to solve was latency and gas fees. Our solution is a hybrid infrastructure to put the execution engine off-chain and keep asset staking, clearing, and settlement on-chain to ensure users get zero gas fees and a zero-latency experience. We solve front-run by implementing high-performance oracle, and long/short imbalance by introducing funding fees, etc.
• • •
Investors & Partners
BTSE Moderator:
With all these significant objectives in mind, please share with us your investors or partners, and are there plans for partnerships with other projects?
Lei Wang:
Our lead investors are Naval Ravikant and Alex Pack. Ravikant is the former CEO of Anglist and founder of Coinlist, and an early investor of Uber, Twitter, and Clubhouse; Pack is the co-founder of Dragonfly and was an early investor in Uni and Compound. Other investors are well-known VCs.
We are officially partnering with Polygon, DODO, and OKEx on the marketing side.
• • •
Features of Kine Protocol
BTSE Moderator:
Now onto the more technical parts. Could you give us a brief overview of the features of Kine Protocol?
Lei Wang:
Unlimited liquidity, zero slippage, immediate execution, enabled API trading — these are all pretty unique features that you cannot find in any other DeFi/CeFi solutions. None of the current DeFi solutions offer these features except Kine, as far as I know of, and that’s why Kine could achieve significantly larger trading volume than any other DeFi derivative markets within the short three and a half months since our launch.
Soon, we will support non-crypto trading, which includes stock indexes, precious metal futures, foreign exchanges, etc.
• • •
BTSE Moderator:
Bridging traditional finance and cryptocurrency — that’s great to know.
Lei Wang:
Unlike other DeFi solutions that are only targeting retail users, we have onboarded three institutions and started trading on Kine (leveraging an API trading feature). They have a good portion of the trading volume. Kine is the only available DeFi solution for institutions and professional derivative traders, and I believe more of them will onboard soon.
• • •
BTSE Moderator:
How do these features tie back into the problem that you are solving?
Lei Wang:
As mentioned earlier, Kine is built with a peer-to-pool mechanism, which allows us to provide unlimited liquidity, zero slippage, and immediate execution for traders without the limitations of a market maker or an order book.
Kine uses a hybrid approach where the trading engine is run off-chain, which allows gas to only be consumed for staking and margin transfers, but not for trading activities.
Derivative trading activity is frequent and can require a lot of gas. It’s important that transactions are fast and inexpensive. Of course, nobody wants to pay a $10 gas fee for each trade, but it doesn’t have to interact on-chain for every trade, so it’s more suitable to be off-chain. However, staking, clearing, and settlement require safety and transparency, and this is why they should be on-chain.
• • •
BTSE Moderator:
Among those you have mentioned, which feature are you most excited about and why?
Lei Wang:
I’m most excited about the peer-to-pool liquidity model. I believe Kine is the first to come up with such a solution. dYdX and injective protocols host their trading engines off-chain, except they are based on an order book. This solves the gas fee problem to an extent, but liquidity and slippage are still significant issues for them. I believe with our success, many more projects will soon follow in our footsteps. This liquidity model has also made “trade anything” possible; the support of traditional assets proves that, and going forward, anything that has a price can be traded on Kine. You will see some very innovative ideas on Kine in Q3.
• • •
$KINE Token
BTSE Moderator:
Can you share with us more about your token? What does it do?
Lei Wang:
The KINE token is a utility token designed to facilitate community governance and incentivize the community of the Kine Ecosystem.
Governance
Once mature, Kine will gradually transition to community governance, allowing the community to decide the protocol’s future. KINE token holders can stake their KINE to vote on or propose new ideas to improve Kine Protocol. Some of such decisions could be:
● Addition/removal of staking assets on Kine.Finance
● Addition/removal of trading assets on Kine.Exchange
● Protocol parameters such as collateral factor, supply cap, risk limits, etc.
Staking & Rewards
● KINE is accepted as a staking asset of liquidity pools.
● KINE stakers will receive a dedicated share of fee pools, allowing higher returns than other collaterals.
● Trading fee revenue from Kine. The exchange will be converted to KINE before being distributed as a reward.
● Long-term KINE stakers will accumulate more voting power for governance.
• • •
BTSE Moderator:
When did the native KINE token launch, and where can the community get KINE?
Lei Wang:
It launched on March 26th, 2021, with an initial listing on OKEx. There is a pool on Uniswap and Pancakeswap as well.
• • •
Staking & Farming
BTSE Moderator:
Will users be able to stake or farm? How does that work?
Lei Wang:
It works pretty much like any other LP farming protocol, except you only need to stake a single asset, not a pair. Right now, BTC, USDT, USDC, ETH, BCH, XRP, LTC, BNB, etc., are supported with different staking ratios. Rewards range from 50% — 200%. KINE token staking is available in the Kine dAPP (https://Kine.finance). For Ethereum users, it is risk-free, and by staking the xKine token back to the pool and minting kUSD, KINE token holders can get triple rewards. For BSC users, you can do LP farming on Kine/kUSD pair with an APY of 135%.
• • •
BTSE Moderator:
Do users gain more by using your platform? How are users rewarded under your plan? For instance, are there any plans to have referral rewards for holders or any similar reward program?
Lei Wang:
Staking and farming are great ways to earn rewards. We reward trading with token rewards as well. Anybody who trades over $1,000 can get extra token rewards.
We have a referral program as well. Anybody who refers a user can automatically get a 15% commission of future fees earned. For brokers and partners, it can go up to 80% based on the volume.
You can contact @EllaNoraaa on our Telegram for the application if you are interested.
• • •
What makes Kine Protocol Unique?
BTSE Moderator:
In terms of competition, there are quite a few derivatives trading platforms out there. How does Kine Protocol stand out?
Lei Wang:
Compared to similar protocols:
- Kine accepts a wider range of pledged assets; almost all major crypto assets can be used for a pledge, which expands our user group
- Kine can support higher leverage and higher frequency derivatives trading
- Most importantly, we solve the biggest issue within the current DeFi derivative space — the high gas fees and latency — by combining on-chain staking, clearing, and settlement and an off-chain trading engine
- The funding fees and ADL mechanism are adopted to effectively reduce the net position of the platform and reduce the impermanent risk for staking users
- Kine developed a high-performance oracle to realize a real-time pricing feed to solve the user loss caused by the front-run.
• • •
BTSE Moderator:
How is your project liquidity solution compared to your competitors?
Lei Wang:
Compared to an order book, a peer-to-pool offers unlimited liquidity and doesn’t rely on market makers. Compared to AMM, a peer-to-pool has an active price feed instead of relying on an arbitrager to peg the price with the market. Both market makers and arbitragers earn profit from retail users’ losses. In this sense, we are protecting the retail users’ benefits and ensuring fairness.
• • •
Kine’s Future Plans
BTSE Moderator:
Please share with us any future plans you have in place, any new exciting partnerships or listings?
Lei Wang:
In the coming months, perfecting the user experience is one of the top priorities we are working on. V2 of our UI is expected to go live in mid-August, and support for traditional assets is expected at the end of August. L2 version implementation will start in Q3. Onboarding on Polygon and our official partnership with Matic is expected to happen in August as well.
• • •
Questions from Community
BTSE Moderator:
We will now open the floor for the community for questions!
Xperia (@xperia3):
Hackers and Scammers are very much active in the market. Can you please provide some information about the security system of Kine Protocol? Does Kine Protocol already have an audit?
Lei Wang:
Security is, of course, the highest priority for Kine protocol. Yes, the code has been audited by Peckshield. We always stay vigilant about any attacks in the DeFi world. Each time we see any new tricks, we review them ourselves and try them on Kine. So far, none of the known ways works on Kine. Time is the best proof. We have been safely running for three months, and we are confident in our security setup and risk control.
• • •
Merissa Beckman (@MerissaBeckman):
What is the most ambitious goal of your project? What is the ultimate vision that your project is trying to achieve within the cryptocurrencies market? I would appreciate it if you could share with us any upcoming updates.
Lei Wang:
I believe blockchain and DeFi are the most revolutionary events of this century, and we want to play a key role in them. We aim to bring more and more users into the DeFi world from CeFi by offering a superior user experience. With our banking experience and crypto expertise, we can move all of Wall Street into DeFi, only better (cheaper, more transparent, bank-free). Everybody should be fully entitled to full returns from their assets without banks and institutions taking a big chunk from it first.
• • •
Renaldo McGraw (@RenaldoFincher):
In my opinion, the current project seems to be undervalued in terms of price. What are your thoughts, and what are the countermeasures? Many projects disappear due to the tough market conditions. How do you ensure the sustainability of Kine? What is your recipe for success?
Lei Wang:
Solid cash flow is the key to any successful project/platform. I tend to stay away from any project without a clear profit model. Transaction fees are the most reliable source of cash flow in the DeFi world, and 70% of transaction fees are used to buy back Kine and reward liquidity providers & KINE holders. This creates solid support for the token price. As the user base and trading volume grow, it will all be reflected in the market value.
• • •
Thomas (@thomasnguyen1):
Non-crypto users are essential for mainstream adoption. How are you planning to attract non-crypto users into your project? Are there any upcoming partnerships that will bring non-crypto users and real-use cases?
Lei Wang:
We will list traditional assets on Kine very soon. I believe this will be attractive to non-crypto users because it’s a lot cheaper and cost-efficient to trade stocks/commodities/foreign exchanges on DeFi instead of going through brokers or banks. We will partner with some traditional asset trading communities to market this feature.
• • •
Porter Bow Ta Onek Shundor (@PorterTibbs):
In your opinion, is Kine Protocol just another company you want to successfully launch and then move to the next one? Or is this something you expect to spend the rest of your life building and improving?
Lei Wang:
Derivative trading is only a part of the future DeFi world; I want to do a lot more with this great team, but whatever we do, Kine is the brand we will do it under, and anything else we build will empower KINE token in every way.
• • •
Kine Protocol’s Social Media
Find out more and connect with Kine Protocol through these channels:
Medium: https://medium.com/@KineProtocol
Twitter: https://twitter.com/KineProtocol
TG announcement: https://t.me/Kineannouncement/
