ShibCrusher: A Liquid Staking Protocol for SHIB on Ethereum with KNINE Utility Integration

Development
1

Hello All,

I just wanted to note, I’ve read the current post about BNB & Base but I wanted to submit this incase it sparked any conversation.

Everyone will have their own opinion & view but I personally don’t put Shib in the same box as Shibarium, as such I still see an opportunity with the original token & liquidity.

ShibCrusher: A Liquid Staking Protocol for SHIB on Ethereum with KNINE Utility Integration

Abstract

ShibCrusher is a decentralized liquid staking protocol built on Ethereum, designed to enhance the utility of SHIB (Shiba Inu token) by enabling users to stake their holdings for stablecoin rewards while maintaining liquidity through a derivative token (knSHIB). By integrating KNINE as a core utility and governance token, the protocol creates interlocking value between SHIB staking and KNINE holding. Leveraging KNINE’s fixed supply and strong ties to the Shiba Inu community, ShibCrusher drives organic demand for KNINE through governance rights, yield boosts, and deflationary mechanisms. This setup not only provides tangible benefits to SHIB holders—such as low-volatility yields in stablecoins like USDC or USDT—but also fosters positive price dynamics for both tokens via supply reduction, demand incentives, and ecosystem flywheels. Inspired by proven DeFi models like Curve Finance’s veCRV and Aave’s stkAAVE, ShibCrusher aims to reward long-term participation in the decentralized Shiba Inu token.

Introduction

The Shiba Inu token (SHIB) has established itself as a prominent decentralized asset on Ethereum, boasting a massive community and significant market liquidity. However, SHIB holders often face challenges in generating yields without sacrificing liquidity or exposing themselves to high volatility. Traditional holding offers no native rewards on Ethereum, while alternative DeFi opportunities can be complex and risky.

ShibCrusher addresses these issues by introducing a liquid staking protocol tailored for SHIB. Users deposit SHIB to receive knSHIB—a liquid, tradeable token that represents their staked position and can be used in broader DeFi applications. Staked SHIB generates yields externally, with rewards distributed in stablecoins to provide predictable income. Central to the protocol is the integration of KNINE, which serves as the governance and utility token, enabling holders to amplify rewards and influence protocol decisions.

This outlines the protocol’s design, economic model, and potential impact on KNINE and SHIB prices, emphasizing a “stake-to-earn” ecosystem that benefits long-term holders.

Problem Statement

SHIB holders seek ways to earn yields on their assets without selling or locking them illiquidity. Existing options, such as basic liquidity provision or farming, often involve impermanent loss, high gas fees, or exposure to volatile rewards. Moreover, governance tokens in ecosystems can lack direct utility, leading to underutilization and price stagnation.

KNINE, with its fixed supply of tokens and deep community roots in the Shiba Inu space, presents an opportunity for enhanced utility. However, without mechanisms to drive demand, its value may not fully reflect its potential. ShibCrusher solves this by creating a symbiotic relationship: SHIB provides the base staking asset with high liquidity, while KNINE adds governance, boosts, and incentives to encourage holding and participation.

Protocol Design

ShibCrusher is deployed on Ethereum, utilizing smart contracts for security and transparency. The core components include:

Liquid Staking Mechanism

• Staking Process: Users deposit SHIB into the protocol, receiving an equivalent amount of knSHIB (a share-based ERC-20 token). knSHIB accrues value over time and remains fully liquid, allowing trading on DEXes like Uniswap or use as collateral in lending protocols.

• Unstaking: To prevent flash loan exploits and encourage commitment, unstaking involves a 24-hour delay. Users request to burn knSHIB, then claim their SHIB after the period.

• Reward Source: Unlike traditional accrual in the staked token, rewards are generated externally by deploying the SHIB pool into yield-bearing strategies (e.g., lending on Aave or Compound, if supported for SHIB, or through optimized treasury management). Yields are converted to stablecoins (USDC or USDT) and distributed to stakers. An oracle like Chainlink ensures accurate and fair reward calculations.

• Payouts: Users claim stablecoin rewards periodically, based on their knSHIB balance and time staked.

KNINE Integration as Central Utility Token

KNINE is not an add-on but a foundational element, creating interlocking value between SHIB staking and KNINE holding.

• Governance Integration (DAO Voting Rights):

• KNINE holders vote on key protocol parameters, such as fee rates, reward distributions, upgrades, or new yield strategies.

• This uses a vote-escrow (veKNINE) model, where locking KNINE grants amplified voting power, ensuring decisions align with committed stakeholders.

• KNINE Locking for Yield Boosts:

• Inspired by veCRV and stkAAVE, users lock KNINE in a veKNINE contract (non-transferable, with balances decaying over time) to receive multipliers on stablecoin rewards.

• Boost Mechanics: Base APY (e.g., 5-10% in USDC) scales up to 2.5x based on veKNINE balance. For example: Boost = 1 + (veKNINE_balance / threshold) * max_boost, with a cap to maintain balance.

• Lock periods range from weeks to years, promoting long-term holding.

• Fee Structure and Buybacks:

• Protocol fees (2-5% on rewards or withdrawals) fund operations, with a portion (e.g., 30-50%) allocated to automated KNINE buybacks on DEXes, followed by burns or distributions to veKNINE holders.

• This creates a deflationary flywheel, reducing KNINE supply while rewarding participants.

• Liquidity and Composability:

• Launch LP pools for knSHIB/SHIB and knSHIB/KNINE, with incentives for providers (e.g., KNINE emissions).

• Integration with oracles and multisigs ensures secure yield management.

The protocol’s smart contracts are Ownable initially, transitioning to DAO governance via KNINE votes for decentralization.

Tokenomics and Economic Model

ShibCrusher’s economics leverage KNINE’s fixed supply and SHIB’s liquidity to drive price appreciation through organic demand and reduced supply.

Impact on KNINE Price

• Supply Reduction via Locking: Locking KNINE for boosts removes tokens from circulation (potentially 20-50% of supply if yields attract users). Longer locks amplify scarcity, pushing prices upward.

• Demand from Utility: Users buy KNINE to access governance and boosts, turning base yields (e.g., 5% USDC APY) into enhanced returns (up to 12.5%). This entices yield farmers, creating sustained buy pressure. If 10% of staked SHIB value translates to KNINE demand, it could generate significant momentum.

• Fee Flywheel: With $100M+ TVL in staked SHIB, annual fees could inject substantial capital into KNINE buybacks and burns, adding deflation. Historical precedents in DeFi suggest 3-5x price surges in adoption phases.

Impact on SHIB Price

• Supply Reduction via Staking: Staking locks SHIB in the protocol, reducing circulating supply by the TVL amount. The 24-hour unstake delay discourages speculative selling, stabilizing floors.

• Demand from Attractive Yields: Stablecoin rewards appeal to risk-averse holders, offering 8-15% APY in low-volatility assets—superior to idle holding. This draws in capital, increasing SHIB buys for staking.

• Indirect Boost from KNINE: KNINE holders, often SHIB enthusiasts, promote the protocol, enhancing SHIB’s utility. A portion of stable yields could fund SHIB buybacks (e.g., 10% converted to burns), creating deflation.

• Network Effects: Higher TVL boosts knSHIB liquidity, enabling DeFi composability (e.g., borrowing against knSHIB), attracting whales and institutions. In bullish markets, this could contribute to SHIB price growth via reduced sell pressure.

Overall, the model fosters positive dynamics: SHIB provides the base asset, while KNINE adds incentives, rewarding long-term holding in a stake-to-earn ecosystem similar to Frax Finance’s FXS boosts.

Risks and Mitigations

• Smart Contract Risks: Vulnerabilities could lead to exploits. Mitigation: Rigorous audits, bug bounties, and pause mechanisms.

• Yield Fluctuations: External yields may vary. Mitigation: Diversified strategies and oracle-backed adjustments; boosts via KNINE locks encourage retention.

• Market Risks: Token prices are volatile. Mitigation: Focus on utility over speculation; stable rewards reduce exposure.

• Regulatory Considerations: Ensure compliance with decentralized principles; no guarantees of returns.

• Adoption Risks: Low initial TVL could limit flywheels. Mitigation: Community airdrops, partnerships, and marketing within Shiba Inu networks.

Conclusion

ShibCrusher represents an innovative step with the Shiba Inu token, transforming SHIB into a yield-generating asset while elevating KNINE’s role through governance and utility. By providing stablecoin rewards, liquidity, and boosts, it offers tangible value to SHIB holders and creates organic demand for KNINE, potentially driving appreciation for both tokens. As a decentralized protocol on Ethereum, it empowers the community to build a sustainable, interlocking economy.

1 Like
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There are potentially some good ideas here, but at this stage - it is just an idea. It is an idyllic description of what would be awesome to build without the research as to whether or not it is possible.

Flags:

  • Liquid staking is inherently done with a proof of stake token so that there is an onchain revenue source. Shib doesn’t have that. So this isn’t liquid staking
  • You ask asking to earn stablecoins on Shib. There is no where that I am aware of that generates yield on Shib on chain. K9 would have to create one and figure that out, and that is most definitely the bigget hurdle

If the community were to research if there are protocols out there that allow you to stake Shib and earn yield and one exists then that aspect of the idea has legs

The only place I know of to look is DeFiLama: https://defillama.com/yields?token=SHIB&minTvl=50000&maxTvl=

There’s nothing here that would bear fruit for this idea

If the community wants to be helpful I’d say the #1 thing they could do to help is research protocols to see if there is a place that allows you to stake SHIB & earn any yield

2 Likes
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Noted :eyes: Thanks for the insight

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How about this for a more basic version to deal with the rewards.

Core Concept: A Reward Pool Funded by ETH Staking
• Instead of directly staking SHIB to earn yield, the system uses ETH staking on the Ethereum mainnet as the “engine” for generating rewards.
• ETH is staked (e.g., via protocols like Lido, Rocket Pool, or directly as a validator) to earn staking rewards (typically in ETH or liquid staking derivatives like stETH).
• These ETH staking rewards are funneled into a dedicated “rewards pool” on the platform (e.g., managed by K9).
• The rewards pool is then distributed to users who stake SHIB, creating an indirect yield mechanism for SHIB holders without relying on SHIB itself having native staking yields.

  1. How SHIB Staking Works in the System
    • Users stake their SHIB into a shared pool.
    • Rewards from the pool are allocated proportionally based on each user’s share of the total staked SHIB—similar to how liquidity providers (LPs) in a DEX pool earn fees based on their percentage ownership.
    • Example: If the total staked SHIB in the pool is 1 billion tokens, and you stake 10 million SHIB (1% of the pool), you’d receive 1% of the rewards distributed from the ETH-generated pool.
    • This keeps things simple and fair, incentivizing more SHIB locking to increase one’s relative share.

  2. Gating Access with Staked KNINE
    • To participate in the SHIB staking pool and claim rewards, users must first stake KNINE.
    • Staked KNINE acts as a “key” or access token:
    • Each unit of staked KNINE unlocks the ability to lock a predefined amount of SHIB in the pool.
    • Example: 1 staked KNINE might allow you to lock up to 100,000 SHIB (this ratio would need to be tuned based on token economics, supply, and desired scarcity).
    • This creates interlocking demand:
    • To stake more SHIB (and earn more rewards), users need more staked KNINE.
    • As demand for KNINE rises (from users wanting access), it could drive up KNINE’s value and utility, tying it directly to SHIB’s ecosystem growth.

  3. Bootstrapping and Scaling the Rewards Pool with KNINE Purchases
    • When users buy KNINE (e.g., via a DEX or on the platform), a percentage of the purchase value (in ETH) is automatically allocated to boost the system.
    • Example: 10-20% of the ETH spent on KNINE could be converted directly into more ETH for staking.
    • This staked ETH generates additional rewards, which flow back into the rewards pool.
    • The result is a virtuous cycle:
    • More SHIB locked → More demand for KNINE to access the pool → More KNINE buys → More ETH staked from the buy fees → Larger rewards pool → Higher yields for SHIB stakers → Incentive for even more SHIB locking.
    • This scales the system organically as participation grows, without needing external funding.

  4. Key Math and Figures to Work Out
    • Reward Distribution Formula: Rewards per user = (User’s staked SHIB / Total staked SHIB) × Total rewards in pool per epoch (e.g., daily or weekly distribution).
    • You’d need to simulate this with expected ETH staking APR (currently around 3-5% annually, but variable) and pool size.
    • KNINE-to-SHIB Ratio: Define how much SHIB can be locked per staked KNINE unit. Start with conservative estimates based on token supplie ratio to prevent dilution.
    • Fee Percentage from KNINE Buys: Test scenarios like 5%, 10%, or 15% allocation to ETH staking. Calculate break-even: If ETH staking yields 4% APR, how much allocated ETH is needed to cover a target SHIB yield (e.g., 2-3% effective APR for stakers)?
    • Example Calculation: Assume $1M in KNINE buys over a month, with 10% ($100K) converted to ETH and staked. At 4% APR, that’s ~$4K annual rewards added to the pool. Divide by total staked SHIB value to get effective yield—adjust based on real data.
    • Risk Factors: Account for ETH staking risks (slashing, volatility), impermanent loss if using LPs, and gas fees. Use tools like DeFiLlama or Dune Analytics to model historical ETH yields.
    • Sustainability Check: Run projections—e.g., if 100M SHIB is staked initially with $500K ETH backing, what’s the monthly reward outflow? Ensure inflows (from KNINE buys) exceed outflows to avoid depletion.
    This setup turns SHIB into a “yield-bearing” asset indirectly, while boosting KNINE’s role as a utility token. This creates a workaround since direct SHIB yields don’t exist (as per DeFiLlama data).

1 Like
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As an additional note, if the concept worked & Knine wanted to offer the system out to additional tokens, it could make sense to rebrand for Scalability to: “KnineCrusher” or “K9Crusher” as this may fit better.
• Shift from “ShibCrusher” to a generic name like “KnineCrusher” or “K9Crusher” to reflect the multi-token capability and center KNINE/K9 as the systems heart.
• This would emphasizes KNINE’s role in “crushing” token inactivity by locking supply and generating yields while keeping it catchy and memorable.
• It could also avoid limiting perception to SHIB-only, signals versatility, and builds long-term value around KNINE.

The system could become a go-to for yield on non-stakable assets.

6

In general, I think the ideas are great but need expectations tempered. You’re asking / suggesting a ferrari when that’s not the budget / resources K9 has. It took 9-12 months to build Bonecrusher with more devs than K9 has now, and this product you’re describing is almost equally as sophisticated. It might be best to think simpler and/or see if there are development agencies out there who could build this quicker and cheaper. The quality of craftsmanship that K9 devs have, this is unrealistic with timelines.

There are also a few holes:

  1. Where is the ETH coming from to generate yield from?
  2. Lido returns about 3% annually on ETH. In order to return that for people staking SHIB, you’d need 1:1 dollar value of ETH staked into Lido for every dollar of Shib that is staked, which is unrealistic

This is still in the idea phase and unfortunately lacks the detail of how it would actually work from a DeFi perspective, despite being a wishful and nice idea

7

Plz no, no DPRK into K9 :sob::sob: :sob:

2 Likes
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Update to the above idea, this outlines the basic concept but may need someone with more knowledge to review if the mechanism is actually achievable.

KNINE Crusher – Dynamic Value-Tracking Staking for SHIB and Beyond

“KNINE Crusher” – A Staking Mechanism to Unlock ETH Rewards for SHIB Holders While Generating Treasury Revenue

Conceptual Proposal for Discussion

  1. Executive Summary

The “KNINE Crusher” is an innovative staking protocol designed to allow SHIB holders to earn real ETH staking rewards (via liquid staking like Lido) while fully preserving their exposure to SHIB’s market price movements. Users must stake/lock KNINE in a fixed ratio to access these rewards, creating demand for KNINE. Importantly, ETH rewards generated from the staked KNINE value flow directly to the K9 treasury, providing a sustainable revenue stream. A possible 0.50% buy/sell tax on KNINE transactions to help cover gas fees for Ethereum-based operations.

This starts with SHIB as the flagship asset but is expandable to other tokens, enabling them to “unlock liquidity” through ETH yields without losing real-time market value reflection. The system uses dynamic tracking to adjust rewards principals based on live prices, ensuring fairness and alignment with market dynamics.

  1. Core Objectives

• Empower SHIB Holders: Stake SHIB to earn ETH rewards on a virtual ETH equivalent that tracks SHIB’s price in real-time – no missed upside or downside.

• Boost KNINE Utility: KNINE acts as the “access key” via a staking ratio, driving adoption without diluting user rewards.

• Treasury Revenue Generation: Rewards from KNINE’s tracked value accrue to the treasury, funding growth and operations.

• Scalability: Expand to other tokens post-SHIB launch, creating a multi-asset “crusher” ecosystem for token earnings.

• Efficiency: Low 0.50% tax on KNINE buys/sells to offset Ethereum gas costs.

  1. Key Mechanics

A. SHIB Staking with Dynamic ETH Tracking

• Users stake SHIB into a vault, locking it to earn ETH rewards.

• At entry and ongoing: A Chainlink oracle calculates the SHIB stake’s value in ETH terms.

• The vault virtually “converts” this value by borrowing/staking ETH from the treasury pool (at a conservative Loan-to-Value ratio, e.g., 50-70%, to minimize risks).

• Automation via keepers (e.g., Gelato): Adjust the borrowed ETH amount based on SHIB price changes:

• SHIB price increases → Borrow more ETH → Stake more → Higher rewards accrual.

• SHIB price decreases → Repay some ETH → Stake less → Lower rewards accrual.

• Rewards: Generated from staked ETH (e.g., Lido’s ~4% APY) on the current adjusted principal.

• Unstake: Original SHIB amount returned (reflecting current market value) + accrued rewards (in ETH or converted back to SHIB).

This ensures the staked value always mirrors the market, with rewards scaling proportionally.

B. KNINE as Access Key and Treasury Contributor

• To participate in SHIB staking, users must co-stake KNINE in a governance-set ratio (e.g., 1 KNINE per 10,000 SHIB).

• KNINE is locked during the stake period (potentially liquid via a receipt token).

• KNINE’s value is tracked similarly: Converted virtually to ETH for staking.

• Key Distinction: Users do not receive ETH rewards from the KNINE-tracked value – these flow entirely to a separate K9 treasury pool for DAO use (e.g., compounding ETH stakes, buybacks, or incentives).

• This creates a “crusher” effect: KNINE enables access while “crushing” value into treasury revenue.

C. Tax and Gas Management

• Possibly Implement a 0.50% tax on KNINE buys and sells (via smart contract).

• Tax proceeds auto-allocate to cover gas fees for oracle updates, keeper triggers, and other Ethereum transactions.

• Remaining tax (if any) can feed into the treasury pool.

D. Treasury Operations and Protection

• Treasury starts with initial ETH (e.g., from prior allocations) staked as stETH for base yields.

• Revenue from KNINE taxes and KNINE-derived rewards compounds the pool.

• No direct holding of SHIB or KNINE – all assets in ETH/stETH to avoid volatility.

• Overcollateralization and liquidations protect against sharp price drops.

E. Expansion to Other Tokens

• Post-SHIB launch: Roll out “KNINE Crusher” modules for additional tokens (Other external meme tokens).

• Each module follows the same structure: Token staking with dynamic ETH tracking, KNINE ratio for access, and treasury capture of KNINE rewards.

• This unlocks liquidity for partner tokens by providing ETH earnings mechanisms, while their values remain tied to live markets.

  1. Example Scenarios

Assumptions (Hypothetical Jan 2026 Prices):

• SHIB = $0.00002

• KNINE = $0.0001

• ETH = $3,000

• KNINE Ratio: 1 KNINE per 10,000 SHIB

• LTV: 60%

• ETH APY: 4%

• 0.50% KNINE Tax: Applied on buy (user pays extra 0.50% in ETH, routed to gas pool)

User Stakes SHIB:

• Buys and stakes 10,000,000 SHIB ($200 value) + 1,000 KNINE ($0.1 value, with 0.50% tax adding ~$0.0005 to treasury).

• SHIB value → Virtual ETH = 0.0667 ETH → Borrow/stake 0.04 ETH for rewards.

• KNINE value → Virtual ETH = 0.000033 ETH → Rewards go to treasury (e.g., ~$0.00001/day compounded).

Price Increase (SHIB +50% to $0.00003):

• SHIB value now $300 → Adjust to 0.06 ETH principal → Higher rewards (~$0.002/day).

• Unstake after 30 days: 10M SHIB ($300) + ~$0.06 rewards (ETH or SHIB equivalent) – total value reflects market + yields.

• Treasury gains from KNINE side: Adjusted to match KNINE price (if it moves), but rewards stay with DAO.

Price Decrease (SHIB -30% to $0.000014):

• SHIB value now $140 → Adjust to 0.028 ETH principal → Lower rewards (~$0.001/day).

• Unstake: 10M SHIB ($140) + ~$0.03 rewards – value mirrors market dip.

Treasury Impact (100 Users):

• Collective KNINE stakes generate ~$10/day in ETH rewards to treasury (scalable with adoption).

• Tax covers ~$5 in daily gas (assuming moderate activity).

  1. Benefits to Ecosystem

• Users: Earn ETH on SHIB without sacrificing price exposure; KNINE lock incentivizes long-term holding.

• KNINE Holders: Increased demand as access key; treasury growth funds community initiatives.

• Treasury/DAO: Sustainable revenue from KNINE rewards + taxes, without volatility risk.

• Expansion Potential: Attract partnerships with other tokens, positioning K9 as a “crusher” hub for DeFi earnings.

  1. Risks and Mitigations

• Volatility/Liquidations: Conservative LTV (50-70%) + Chainlink oracles with TWAP to prevent exploits.

• Gas Costs: Covered by 0.50% tax; optimize with batching.

• Adoption: Start with SHIB marketing; DAO votes on ratios/APYs.

• Security: Full audits (e.g., PeckShield) before launch.

  1. Implementation Timeline

• Phase 1 (Q1 2026): Smart contract development and audits.

• Phase 2 (Q2 2026): Testnet launch for SHIB module.

• Phase 3 (Q3 2026): Mainnet rollout + expansion planning.

• Budget: ~$50K for dev/audits (from treasury or raise via DAO).

This proposal turns KNINE into a powerhouse utility token while delivering real value to SHIB holders and beyond.

9

Just my fast thoughts, the math doesn’t add up.

  • If the DAO stakes 82 ETH at ~4% APY, at today’s prices that’s only around $800–$900/month gross. How is that enough to both reward SHIB stakers and still generate meaningful revenue for the DAO?
  • Wouldn’t it be more rational for the DAO to simply stake the ETH directly, keep the yield, and conserve runway until market conditions improve?
  • Also, $50k for both build + audit feels materially understated for something this complex (especially if you want it to be robust and secure).

Also, we really dont know how much the DAO will have in treasury after the migration, we could maybe have more than 82 ETH to use, but most likely less(?).

10

Hi Seizan,

I’ve tried a couple of times to find the best way to explain the concept but I still feel I’m not getting the description across clearly, sorry.

Does the below make it clearer, the idea is to use the Shib liquidity that is staked, to borrow the eth to stake for the rewards while creating a price protection, so the user or the treasury doesn’t suffer a loss due to price movements. If the process can be created, the same logic is also used for the staked KNINE for the access, but the liquidity that is borrowed from the locked KNINE, provides the ETH rewards for the KNINE treasury only, not the user who is staking the KNINE.

Clarified Explanation: Using Staked SHIB Liquidity for ETH Rewards with Price Protection
In the KNINE Crusher system, staked SHIB isn’t sold or directly converted—it’s used as collateral (like a loan against your assets) to borrow ETH. This “unlocks” liquidity without dumping SHIB on the market. The borrowed ETH is staked for rewards (e.g., via Lido), and a dynamic mechanism adjusts everything to “protect” against SHIB price swings by preventing over-borrowing or losses (via overcollateralization and auto-rebalancing). This ensures the unstaked value (returned SHIB + rewards) naturally matches the current SHIB market price— you get back your original SHIB amount, whose value has changed with the market up or down, plus proportional rewards.
Step-by-Step Process

  1. Staking SHIB (Locking Liquidity): You deposit SHIB into the vault (with required KNINE ratio for access). Once it is in the vault, it is used as collateral to borrow the eth for staking.
  2. Using Liquidity to Get ETH:
    • An oracle (e.g., Chainlink) calculates your SHIB’s current value in ETH (e.g., 10M SHIB at $0.00002 = $200 or ~0.067 ETH if ETH=$3,000).
    • The vault borrows ETH up to a safe Loan-to-Value (LTV) ratio (e.g., 60% = borrow ~0.04 ETH). No SHIB is sold—it’s just pledged as backing.
    • Borrowed ETH is immediately staked (e.g., to Lido for stETH), starting reward generation (~4% APY in ETH).
  3. Mechanism to Protect Against SHIB Price Movement:
    • Overcollateralization: You always borrow less than SHIB’s value (e.g., 60% LTV means 167% collateral ratio). This “protects” the system—if SHIB price drops mildly, your position stays healthy without forced sales.
    • Dynamic Auto-Adjustment: Keepers (automated bots like Gelato) check prices periodically:
    • If SHIB price drops (e.g., value falls to $140), the keeper repays some borrowed ETH (reducing staked principal to ~0.028 ETH) to maintain the safe LTV. This scales down rewards but prevents liquidation (full loss).
    • If SHIB price rises (e.g., to $300), borrow more ETH (up to ~0.06 ETH) to keep proportional, boosting rewards.
    • Protection Goal: Avoids extreme risks (e.g., flash crashes liquidate only if drop >40% in one go, rare with oracles). Treasury is shielded as it lends ETH against overcollateralized SHIB.
  4. Rewards Accrual: ETH yields accumulate on the current (adjusted) staked ETH amount, scaling with SHIB’s value. Rewards are “protected” indirectly—no over-earning if price tanks.
  5. Unstaking SHIB:
    • Keeper unstakes ETH, repays the borrow (principal + any interest, offset by yields).
    • You get back your original SHIB amount (e.g., 10M SHIB, now worth whatever the current price is—say $140 if it dropped).
    • Plus net rewards (e.g., $5 in ETH, convertible to ~357,000 SHIB at current price).
    • Total Value: Matches current SHIB market (principal reflects price movement) + additive rewards.
    This way, SHIB holders retain full price exposure (upside/downside on principal) while earning protected ETH yields. Treasury benefits from KNINE’s separate rewards without holding volatile assets.
11

Exactly. The economics don’t make sense.

12

Hi All,

I reached out with this message in the Whale chat but adding it here as well so it doesn’t get lost.

Is anyone who has technical knowledge able to confirm if they believe the below is actually possible please?

In this proposal, the part I am hoping for some guidance on, is if it’s technically possible to create the ability to have SHIB or any token staked in a system, which then allows KNINE access to the staked equity, so it can be converted or Loaned against to stake the ETH value in equity for rewards. While the staked ETH is pegged to the SHIB / tokens price, so the KNINE treasury & the SHIB / token staker is protected against any price movement while the SHIB / token equity is being staked. Possibly a bit like how BONE was pegged 1:1 to KNBONE.

Apologies about the example figures I provided in the above proposal, I was short on time & admit I didn’t double check they stacked up, I believe I can offer a better earning potential version for KNINE that addresses this if the part I am not sure about is actually technically possible to achieve, as in being able to use the staked equity from a token while being pegged to its price movement.

Thanks for any feedback provided.