Knine combined futures

Development
1

K9 Finance DAO Lending, Borrowing, Centralized and Decentralized Futures Programs

  1. Introduction and Objective The K9 Finance DAO ecosystem aims to expand its DeFi capabilities by introducing both decentralized and centralized lending systems alongside a futures trading program. These initiatives will enable K9 token holders to earn passive income, access liquidity, and participate in decentralized futures markets while creating deflationary mechanisms for the K9 token.

  2. Proposal Details

a) Decentralized Lending System with Dividends for Lenders

Mechanism: Lenders deposit K9 tokens into decentralized liquidity pools to earn yield based on interest from borrowers.

Dividends: A portion of the interest collected will be distributed as dividends to lenders, providing a sustainable passive income stream.

Governance: DAO members will vote on key parameters, including interest rates and collateral requirements.

b) Centralized Lending System Using Treasury for Buybacks and Burns

Mechanism: The DAO treasury will issue loans from collected K9 tokens, earning interest from borrowers.

Buyback and Burn: Interest generated will be used to repurchase K9 tokens from the market, which will then be burned to reduce token supply and increase value.

Sustainability: Loan issuance limits and interest rates will be determined through DAO governance to ensure long-term efficacy.

c) Futures Trading and Ratio Calculation

Futures Market: Users can open long or short leveraged positions on K9 tokens.

Funding Rates: Calculated as (Perpetual Price - Spot Price) / Spot Price * Funding Interval.

Leverage Limits: Adjustable from 1x to 20x, with strict margin requirements to manage risk.

Position Ratio Monitoring: Automated tracking of long vs. short positions to prevent manipulation.

  1. Proposal Details

a) WHAT: Solution Overview

The lending and borrowing program will be built on smart contract-based liquidity pools, allowing users to lend and borrow K9 tokens in a secure and decentralized manner.

Key Features:

Lending Pools – Users deposit K9 tokens to earn yield based on supply and demand.

Collateralized Borrowing – Borrowers must provide collateral (ETH, stablecoins, or other assets) to secure loans.

Algorithmic Interest Rates – Interest rates dynamically adjust based on market conditions.

Liquidation Mechanism – Automatic liquidation protects lenders if a borrower’s collateral falls below the required threshold.

Security Measures – Smart contracts will undergo rigorous audits to ensure fund safety.

b) WHO: Stakeholders

Lenders – K9 token holders who wish to earn yield by providing liquidity.

Borrowers – Users needing liquidity without selling their K9 holdings.

K9 Finance DAO Governance – DAO members will vote on key parameters such as loan-to-value (LTV) ratios, interest rates, and supported collateral types.

Smart Contract Developers – Responsible for building and securing the lending and borrowing infrastructure.

Auditing Firms – Conduct security audits before launch to ensure contract safety.

c) WHERE: Implementation Platforms

Ethereum Mainnet or Layer 2 Networks – The program will be deployed on Ethereum and possibly Layer 2 solutions like Arbitrum or Optimism for lower fees.

K9 Finance DAO Governance Portal – Community voting on lending parameters will take place here.

DeFi Aggregators – Integration with DeFi platforms like DEXs and lending dashboards for visibility.

d) HOW: Resources & Execution Plan

Funding – Development, security audits, and initial liquidity incentives will require a budget from the DAO treasury.

Technical Support – Smart contract developers and DeFi security experts will be hired.

Community Involvement – DAO members will help set interest rates, collateral types, and risk parameters.

Marketing & Adoption – A community awareness campaign will drive participation from lenders and borrowers.

TVL: Measure of K9 tokens locked in lending pools.

Buyback Efficiency: Amount of K9 tokens burned via centralized lending profits.

User Adoption: Number of participants in lending and futures markets.

Revenue: Dividends paid to lenders and treasury income from interest.

Conclusion & Next Steps This proposal introduces decentralized and centralized lending systems with unique benefits: dividends for lenders and deflationary tokenomics through buybacks and burns. Additionally, decentralized futures trading will enhance liquidity and price discovery, positioning K9 Finance DAO for sustainable DeFi growth.

3 Likes
2

Now you have my attention and I must say it is about time.

Can we have a visual mock up for this proposal by chance with a few examples including accepted tokens?

1 Like
3

USER LONG ENTRY: (example) deposit 2.2 usdt x10 leverage And receive 19.8 usdt (borrowed) A purchase order is executed in case the price of knine drops +9% an automatic sale will be executed and the borrower receives his USDT back.(generating 2 transactions with commissions for each action) (overmargin case) If the position is within the margins, the user can maintain the position with profits for as long as necessary while their borrowing costs increase.

USER SHORT ENTRY: (example) deposit 1M knine x10 leverage and receive 9M knine (borrowed) A sell order of 10 M is executed In case the price of knine increases by +9% a purchase order is executed and the borrower receives his knine back. (overmargin case) If the position is within the margins, the user can maintain the position with profits for as long as necessary while their borrowing costs increase.

The leverage/margin ratio can be variable at the user’s discretion as long as it secures and maintains the lenders’ positions.

This example can be extrapolated to any pair.

(Sorry, I only have an Android smartphone, I can’t do anything better, and I have no design skills)

4

I would also like lenders to only be able to be users who have locked tokens for at least 6 months, thus ensuring the lender’s trust in the ecosystem.It would be interesting to create a “liquid” locking token (only suitable for loans) but as interchangeable as knine for the correct execution of the contract.

5

This sounds like an interesting proposal, would like to hear more and to see whether this is something that can actually/viably be scoped if there was a majority vote for it.

1 Like
6

Perhaps the most interesting thing for lenders would be to be able to lend their farming and their real yield staking, and I find it to be the most interesting pair. (knine/bone)

I am not an engineer or a developer. I just showed my idea and a product that I would like to see in the ecosystem. I need your help to formulate it in the best way for the round table.

7

I don’t much like these kind of proposals. I think this need to be evaluated by the Knine team and then vetted to the round table of dogs as a viable project or not.

8

Thank you for submitting your first proposal. You raise some interesting ideas which require further research before being properly considered.

  1. I am not a legal expert but I know that providing borrowing/lending may fall under the regulations of financial companies and potentially licensing etc so requires much deeper research into this area (especially from Panamanian DAO perspective) before it can be fully considered.

Plus holding others funds in custody (borrowers collateral) is also an activity requiring financial certification in many jurisdictions.

There are a lot of legal risks involved which should be identified and weighted first.

  1. I am not sure how much demand for such lending/borrowing of K9 tokens there will be since it will be very niche and limited to single specific token. The revenue from such project might not cover the costs of building the product and maintaining license and regular audit requirements.

It might be worth considering expanding the lending/borrowing to other tokens as well to capture greater market share. But a study of competitors is needed to see how profitable/saturated this market is.

  1. The interest rates should be determined automatically by the contracts based on supply and demand to keep things always in balance. It would be impossible for the DAO to set a fixed interest rate and run with it for prolonged period of time or to have DAO vote on updating them often.

Please do some research in above topic in order to discuss this further.

Blessings.

2 Likes