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Kine Protocol

Kine Protocol (KINE) (Launched March 2021) is an ERC-20 native cryptocurrency token issued atop the Ethereum Blockchain to be utilized within the Kine protocol's ecosystem. Kine protocol is a decentralized protocol that employs the function of the blockchain to be a fast and transparent ecosystem, introducing an effortless way to trade derivatives on the Ethereum blockchain.[1]

Company

Kine Protocol (KINE) is a Cryptocurrency-Blockchain project created by its mother company, KINE Technology Ltd. KINE Technology Ltd (Founded on the 15th December 2020) is an innovation-driven FinTech and blockchain company located in Singapore, offering Information Technology and Financial Services . The ecosystem has rightly designed its project, i.e Kine Protocol, as a DeFi (Decentralized Finance) Derivatives trading protocol, issued on the Ethereum blockchain.

Team Members

KINE Technology Ltd has its members of employees' number ranging between 11 and 50 persons from different places and functional inputs to assure the ecosystem its pursuit. KINE Technology's Founder and CEO is Lei Wang while Lewei (Jerry) Li partners with the company as its co-founder and also helps to craft DeFi (Decentralized Finance) products.

History & Backstory

Kine Protocol's core team has been in the derivatives business for a while. Between 2019 and 2021, the ecosystem's founders led Huobi's institutional business, which is one of the largest Cryptocurrency trading businesses, in the world. Before the Kine team delves into cryptocurrencies, its team has spent the previous 5 years working at major investment banks which includes Merrill Lynch, HSBC, and Citigroup. Kine's core team excitedly incorporates its exquisite expertise across traditional finance and the crypto-native centralized trading platforms to the world of DeFi (Decentralized Finance).[2][3]

With an interest in delving into DeFi (Decentralized Finance), Kine Protocol has spent the past 2 years learning and participating in the space and is convinced that DeFi (Decentralized Finance) will disrupt not only Centralized Finance (CeFi), but the entire financial system. Having witnessed pioneers like Uniswap (v2) and Compound revolutionize token trading and lending, Kine Protocol believes that, finally, the time to do the same to the derivatives market.

Dashboard

Kine Protocol's dashboard introduces such a simple User interface that its users can utilize without complications. The Kine dashboard indicates a broad overview of varieties of data- including MCD (Multi Collateral Debt) Market Value, MCD Price, amount of asset a user has, and the entire Kine circulating market value.

Overview

Kine Protocol is a decentralized protocol that enshrines a general-purpose Liquidity pool, backed by a customizable portfolio of Digital assets. This Liquidity pool allows traders to open and close derivatives positions according to trusted price feeds, avoiding the need for counterparties. This project, Kine Protocol, exists to remove the limitation on existing peer-to-pool (i.e peer-to-contract) trading protocols, by expanding the collateral space to any Ethereum-based assets and allowing third-party liquidation.[4]

As consistent with the traditional financial markets, derivatives trading volumes far exceeds spot. Kine's core team believes that this is inevitable in DeFi too, assuming that the right infrastructure is built. This is where Kine Protocol is introduced into DeFi as a derivatives trading platform where any asset (which includes cryptocurrencies or non-crypto currencies), can be traded with up to a 100x leverage.

Kine offers traders a Centralized Finance (CeFi)-like trading experience, complete with low gas costs and significantly better economics for Liquidity Providers (LPs).

To design the Kine Exchange, Kine's team initiated what is called a peer-to-pool model (e.g. Peer-to- smart-contract), quite similar to protocols like Compound Finance and Synthetix. This came to bear after the core team had spent months identifying all the possible shortcomings to the model when applied to the decentralized derivatives market.

Retrospectively, with the strategic interest of Kine Protocol in the DeFi (Decentralized Finance) multi-verse, DeFi itself will attain a quantum leap forward, making the Ethereum blockchain have derivative markets that support limitless synthetic assets that millions of traders can use. This project also aims to close the gap between the DeFi (Decentralized Finance) trading experience and the CeFi trading experience for derivatives, such that DeFi (Decentralized Finance) will now have the same functionality as leading CeFi trading platforms, resulting in more and more traditional cryptocurrency traders and even non-crypto traders being on-boarded into the DeFi (Decentralized Finance) ecosystem.

Features

Having built Kine Protocol as a fast, transparent, and effortless way to trade derivatives on Ethereum, the ecosystem has designed and implemented novel solutions based on its learnings from TradFi and CeFi and is offering the following improvements as the ecosystem's primary feature:[5]

More Tradable Assets:

Kine Protocol's Automated Market Maker (AMM) model works well for spot trading but has serious problems when it comes to exotic assets such as derivatives and synthetics. Kine avoids depending on individual liquidity pools (like the AMM model) and further simplifies the process of adding new assets. The peer-to-pool model allows us to extend the list of tradable assets far beyond the crypto space alone.[6]

CeFi-Like Trading Experience:

In comparison to advanced and Techy centralized solutions, Kine Protocol's DeFi (Decentralized Finance) derivatives are a strictly inferior experience. Primarily, traders usually experience much higher slippage. Kine Protocol was introduced to bring solution this with the guaranteed liquidity of the Peer- to-pool model. In addition, Kine incorporates synthetic funding rates and auto-deleveraging features from Centralized Finance (CeFi) that enable it to offer up to about 100x leverage and cross-margining.

No Front Running:

In the face of having Pure L1 (leverage x1) trading protocols on Ethereum suffer from toxic front-running that takes advantage of the delayed price oracles, and sometimes leads to massive losses for Liquidity Providers (LPs), Kine implements a high-performance oracle that sources real-time quotes from major exchanges with less than a millisecond of latency, leading to better returns to LPs.

Higher Throughput & Lower Gas Costs:

Derivatives trading protocols require frequent transactions and have thus been one of the hardest hit by rising Ethereum gas fees. Kine solves this with a hybrid approach where the trading engine is run off-chain. Users only need to pay gas for staking and margin transfers, with zero gas consumption on trading activities. Kine can support 10,000+ simultaneous trading users with 4,000+ TPS. Over time, Kine Protocol aims to move its off-chain engine to a high-performance L2 rollup so that the entire trading experience exists fully on-chain.[7]

Kine Protocol Testnet

Kine Protocol launched the exchange testnet on the 8th of March 2021. Kine opened the Protocol's Staking and Trading functions for public tests on that same day. Users can find the Kine Staking testnet client available at the site "kovan.kine.finance", and are to ensure to switch their wallet provider to Kovan network to use the protocol's testnet without any costs.

Kine-Tech

The Kine tech is the sum of the technological inputs employed within the Kine Protocol, which includes Smart contracts, controllers, and other functions as utilized within Kine's ecosystem:

Kine-Tecture (Kine Contract Architecture):

This section lays out the detailed architectural design and implementation of the Kine Protocol. KToken contracts (as the Kine Protocol's smart contracts are called) accept Staking assets from users and mint transferrable kTokens from which users can redeem the staking assets. Controller contract on the other hand functions as the risk controller by allowing or rejecting users' actions according to their collateral with respect to their liquidity states. KMCD contracts keep records of Multi Collateral Debts (MCD) and work with Minter contracts to control the supply of kUSD. Kaptain contract along with the KineOracle contract keeps updating asset and debt prices to feed Controller and Minter for their calculations.[8]

KToken Contracts

KToken contracts is a technological function within Kine Protocol, that implements the functionality of Staking assets as collateral to users. By staking assets to KToken contracts, Stakers (or Liquidity Provider) gain (i.e mint) kTokens representing their staking balances and may use these balances as liquidity to increase their MCD Limit in order to mint kCurrency. The minted kTokens can be redeemed partially or in full to withdraw the assets or be transferred to others following ERC20 protocol. Before kTokens being redeemed or transferred, the Controller contract will check if the owner's collateral is sufficient against its MCD to allow or reject transactions.[9]

Contracts Structure:

Within Kine Technology, every type of staking asset is contained by a KToken contract. There are currently two kinds of kTokens, KEther and KErc20, which manage ether and ERC20 tokens respectively. KErc20 follows a Delegated Proxy pattern for upgradability, where KErc20Delegator is the storage contract while KErc20Delegate is the logic implementation contract. Users may interact with KToken, Controller, and Minter for majority of Kine Protocol functionalities.

Functions within Kine-Tech:

Mint- Users can transfer underlying ERC-20 tokens into KErc20 contract or ether to KEther contract as collateral and mint equivalent amount of kTokens.

Redeem- When kTokens are burnt from this contract "msg.sender", and an equivalent amount of ERC-20 tokens from KErc20 contract or ether from KEther contract are transferred to "msg.sender". There will be a check on "msg.sender's" liquidity first through what is known as the controller contract and will be rejected if liquidity is not sufficient after the token transfer.

KMCD Contract- MCD means multi Collateral Debt, and as implemented within Kine protocol are implemented by KMCD contracts. Each KMCD contract can hold its own logic on debt creation and utilization. Currently, there is only one KMCD contract in Kine Protocol, which incurs debt when users mint kUSD through the kUSDMinter contract. The minted kUSD will then be used to trade synthetic assets in Kine Exchange.

Kine Ecosystem

The following are basic products notably utilized within the Protocol, introducing users to an uncommon exchange and the ecosystem's 'Perfect Staking Pools'.

I. Kine Protocol Exchange (KPE):

Kine Exchange offers its users, not just a tradeable ecosystem but an easy-to-relate user interface. This crypto-exchange is not just unique by introducing a 100x Leverage, but it's such an exchange platform that helps users enjoy trading 24/7 and assures guaranteed liquidity and transparent fees. The Kine Exchange Protocol employs cross Margin on any and every Asset and virtually any asset can be supported by the protocol's peer-to-pool engine, either it's Bitcoin (BTC), Ethereum (ETH), altcoins, gold, or fiat currencies. Kine Protocol's Exchange also supports State of the art cross margining and also helps to maximize capital efficiency. The ecosystem is opened to Zero Slippage and Guarantees Execution, such that every trade will be executed against real-time price feeds with zero slippage, guaranteed by Kine's over-collateralized liquidity pool.[10]

kine trading view: Kine Exchange

Kine Exchange Feature

The following describes the basic features of the Kine Protocol's exchange:

Cross Margin on Any Asset:

Users can make use of the platform's cross margin, since virtually any asset can be supported by the peer-to-pool engine, either Bitcoin (BTC), Ethereum (ETH), etc. Kine also supports state-of-the-art cross margining, maximizing capital efficiency.

Zero Slippage :

Kine Protocol's Exchange ensures that every trade is to be executed against real-time price feeds with zero slippage, and this trading feature guarantees the exchange's over-collateralized Liquidity pool.

Up to 100x Leverage :

Users can trade with up to 100x leverage while enjoying an all-day and all-week guaranteed liquidity and transparent fees.

FUNCTIONALITIES within Kine Exchange

Multi Collateral Debt (MCD) Pool:

One important function within Kine Protocol is its Multi Collateral Debt Pool. Users incur a Multi Collateral Debt (MCD) when they mint kUSD (the Kine Protocol's Stablecoin pegged to the USD). The MCD value can increase or decrease independent of their original minted value, based on the net exposures taken by the liquidity pool. The pool provides liquidity to all trading pairs quoted on Kine Exchange. It accumulates and distributes fees and fundings to the stakers.

The stake in a Liquidity Pool is represented by a collateralized debt position, whose price is determined by the liquidity pool's profit-and-loss from market-making activities. The outstanding debt has to be repaid before a Liquidity Provider can withdraw pledged collaterals. In return, the Liquidity Providers (LPs) or Stakers, will receive fees generated by the trading platform.

Liquidity pools are backed by a diverse portfolio of digital assets that will prevail single-asset pools, as the former allows for the customized combination of collaterals that improves the capital efficiency for Staking. Moreover, such pools are less likely to fall in death spirals as diversified collateral portfolios are more resistant to market turmoils.

Risky-asset-backed Stablecoins, such as Dai (by MakerDAO) and sUSD (Synthetix)) are essentially collateralized lending systems. Dai does not have an endogenous liquidity pool and the borrowers (i.e. vault owners) only need to pay interests in the form of stability fees. Synthetix pioneered in a debt-based liquidity pool where sUSD minters' debt value is subject to a varying debt price.

The compound is a more versatile lending system, as it accepts portfolio collateral from an expandable set of digital assets, and allows third-party arbitrageurs to provide liquidity in extreme market conditions.

Peer-to-Pool Trading:

Kine protocol uses Peer-to-pool trading within its Exchange platform. The criticality of this as seen within traditional finance explains why derivatives are normally traded as peer-to-peer bilateral contracts. Several DeFi (Decentralized Finance) protocols such as Synthetix, Hegic, and FinNexus (FNX) move derivatives trading to peer-to-pool models. Liquidity is collected together in the collateral pools. The pools are the counterparties to all net positions while providing collaterals to them. Risks and trading fees are shared across the entire group of liquidity providers.

Orders submitted to a peer-to-pool engine are filled at an exchange rate through price feeds supplied by an oracle. This provides infinite liquidity up to the total value of the pool and zero slippage.

CFD and Synthetic Financing:

As one of the primary functionalities within Kine protocol, services traditionally provided by prime brokers to hedge funds is the provision of leverage, that is, loans extended to hedge funds to conduct trading and enhance returns. In markets with enhanced capital requirements, prime brokers have begun to offer an alternative means of providing hedge fund clients with leveraged exposure to securities. Known as synthetic financing, this alternative requires the prime broker to enter into derivatives contracts with the clients to replicate the desired exposure.

A contract for difference (CFD) is a contract between two parties, stipulating that the buyers (long position) will pay to the seller (short position) the difference between the current value of an asset and its value at contract time. CFDs were initially used by hedge funds and institutional traders to gain exposure to certain markets.

Staking Pool

Described within Kine protocol as the Perfect Staking Pool, is an ecosystem with which users can start with assets of their choice. The Staking interface characteristically provides its user with the detailed total collateral, debt, and collateralization ratio with respect to the user's value.

Assets staked into the contracts increase the user's debt limit. The debt limit equals staking asset's market value times Collateral Factor. Staking assets' value is governed by price feed provided by on-chain oracles. Collateral Factor is a system-wide parameter determined by the asset's price volatility and liquidity.  The Kine staking pool accepts ETH, WBTC, USDC, KINE, and other major ERC-20 tokens. Users can start staking with the asset of their choice with no hassle-free. When a staker wants to withdraw collaterals or exit the system, they must pay down their debt by burning $kUSD. If the MCD pool fluctuates while they are staked, they may need to burn more or less $kUSD than they originally minted.

Token Supports

Kine Protocol currently supports Ethereum (ETH), Tether (USDT), and mainstream ERC20 assets like Wrapped Bitcoin (WBTC) and USDC. Also, Kine Protocol aims to support $KINE Staking shortly after its full release. The protocol also aims that more assets that are considered safe and stable will be listed in the future.

Steps to Staking & Minting $KINE:

To initiate Staking within Kine protocol, users are required to:

staking process: Trx approval and WBTC waiting

  • Connect to Kine Finance dApp,
  • Enable the token they want to stake, (e.g A user wants to stake Wrapped Bitcoin (WBTC)).
  • Proceed to click "Enable", then "Use WBTC as Collateral"
  • Approve the transaction and wait for a bit, till WBTC will be enabled.
  • Now click "Add" to ensure the approval of WBTC for Staking,
  • Approve the transaction and wait for a bit, the approve button will change to "STAKE".
  • Now input their staking amount, or click "Max" to stake all the token balance and proceed to click "STAKE"
  • Approve the transaction and wait for a bit; the user's staking value will then increase.

Participants of Kine Ecosystem

Within the Kine ecosystem, there are a number of important roles to play, which includes:

Stakers:

Stakers are active users that:

  • Stake cryptocurrency assets and mint kUSD to receive $KINE tokens as rewards and are composed of trading fee distribution and token incentives.
  • Passively bear the Liquidity pool's exposed to risk, profits when traders take the loss as a whole and vice versa.

Traders

Kine traders are participants of the ecosystem that:

  • Trade on Kine exchange, enjoy zero slippage, leveraged cross margin trading experience on crypto + non-crypto assets.
  • Pay trading fees which are ultimately rewarded to stakers.

Liquidators:

Liquidators on Kine's ecosystem are engaged within the ecosystem to:

  • Pay-back MCD debt by $kUSD on behalf of insolvent Stakers.
  • Help to protect the liquidity pool from under-collateralization.
  • Cease an amplified portion of staked assets upon successful liquidation, which can be realized into immediate profits.

Kine-Cycle: The Experience

Kine Protocol offers its users a sense and experience such that entering into the Kine ecosystem, introduces a lifecycle typical to its user.

Exp I: Stake and Mint

The very first experience users will get acquainted with within the Kine Protocol, is to stake assets in Kine Finance Decentralized application (DApp). Users will have the "Staking Value" increased and get "Debt Limit", which can then be minted or mined into $kUSD as actual debt to the system. For every USD worth of "Debt Limit", up to 0.8 $kUSD can be minted. The 20% haircut here is set for liquidation buffer.

Exp II: Trade on Kine Exchange

After minting, the $kUSD can be transferred into Kine Exchange as a trading margin. All trading gains and losses will be settled in $kUSD. $kUSD can be bought or sold on popular decentralized exchanges such as Uniswap (v2) and DODO (cryptocurrency).

Exp III: Burn and Unstake

To withdraw the staking asset, users need to pay back the outstanding debt by burning an equivalent amount of $kUSD.

Exp IV: Claim Rewards

Kine Protocol promises to periodically distribute rewards to all users with outstanding debt. When there are rewards distributed, users can effectively claim them.

Tokenomics

Kine Protocol (KINE) is an ERC-20 cryptocurrency token issued atop the Ethereum blockchain. Kine Protocol issues two tokens within its platform and functions separately, based on its individual use-cases. At its core, the Kine Protocol is a collateralized lending system. While the collaterals are general ERC-20 assets, the lending asset is a special purpose token representing a stake in a liquidity pool. The two functioning tokens within the Kine Protocol include the platform's native token known as $KINE and a Stablecoin called $kUSD.

$KINE Token

The token's ticker is denoted as $KINE and it is the Protocol's native token. $KINE cryptocurrency is issued on Ethereum following ERC-20 standard. The $KINE token is a utility token designed to facilitate community governance and incentivize the virtuous circle of the Kine ecosystem. The total supply of $KINE token is 100,000,000 KINE tokens and it has recorded an All-Time High of $5.58 USD on March 11, 2021, an All-Time-Low of $2.71 USD on the 12th of March, 2021.

$KINEContract Address
Token contract address:0xCbfef8fdd706cde6F208460f2Bf39Aa9c785F05D

$kUSD Token

Kine Protocol ($kUSD), is the exchange's Stablecoin, pegged with the United States dollar and utilized within Kine Exchange Protocol. The token is a mintable token with the following as its ways of utility within Kine's ecosystem:

As Income Distribution: Trading fees and fundings collected by Kine Exchange will be distributed to the Liquidity pool's Stakers. The exchange will accumulate incomes in $kUSD token, and convert it into $KINE tokens through third-party Decentralized Exchanges (DEX) such as Uniswap. Stakers can periodically claim their rewards from the distribution contract.

For Burning: When a Staker wants to withdraw collaterals or exit the system, they must pay down their debt by burning kUSD. If the MCD pool fluctuates while they are staked, they may need to burn more or less kUSD than they originally minted. The process of reducing debt is as follows: Certain amount of kUSD is converted to MCD by the latest debt price supplied by the oracle. The MCD is returned to the lending system and the unused debt limit increases. With an unused debt limit, users may withdraw part or all of staked assets.

Liquidation- If a staker's outstanding MCD value exceeds its debt limit, a portion of the outstanding MCD may be repaid by burning kUSD in exchange for an amplified amount of the staker's collateral. This incentives arbitrageurs to swiftly step in to reduce the staker's exposure, and eliminate the protocol's risk. The proportion eligible to be closed, a close factor, is the portion of the MCD that can be repaid and ranges from 0 to 1, such as 25%. The liquidation process may continue to be called until the user’s outstanding MCD is less than their debt limit. Any Ethereum address that possesses kUSD may invoke the liquidation function.

Token Utility-

The $KINE token utility includes:

Governance:

Once $KINE is mature, it will gradually transition to community governance, allowing the community to decide the future of the protocol. KINE token holders may 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.

Staking

$KINE tokens are accepted as a staking asset of liquidity pool stakers to receive a dedicated share of the fee pool, allowing higher return than other collaterals. Other functions utilized with the $KINE token include:

  • Trading fee revenue from Kine.Exchange will be converted to KINE before being distributed as rewards.
  • Long-term KINE Stakers will accumulate more voting power for governance.

Exchanges

Currently, the most active market trading $KINE is Uniswap (v2) cryptocurrency Exchange. Other exchange platform that supports trading $KINE include:

  • OKEx,
  • Bibox,
  • LBank,
  • Balancer Exchange, and
  • DODO.

Token Description

Fundraising and ICO/IDO Sale:

Token allocation
The $KINE token is a utility token designed to facilitate community governance and incentivize the virtuous circle of the Kine Ecosystem.

Kine Protocol had its seed sale way before the token launch in March and sold a targetted number of 13,000,000KINE tokens from the Maximum Supply of 100,000,000 KINE at a seed price of $ 0.200.

This seed sale raised a total of $ 2,600,000USD. Another 12,000,000 KINE were sold during a private sale at a private price of $ 0.360, which eventually yielded a fundraise of $ 4,400,000USD. AKine protocol has thus been able to raise a total of $ 7,000,000 USD from its 25,000,000 KINE token Private/Pre-sale.

Recently, protocol began its Initial Dex Offering on the 11th of March at an IDO price of $ 4.00 USD for 5,000,000 KINE tokens which is still ongoing.

AllocationDescriptionAmount ($KINE)Percent (%)
Balancer Liquidity Bootstrapping Pool (LBP)Initial DEX Offering in the form of LBP in March 20215,000,000 KINE5%
Seed supportersSold at $0.20Tokens are vested; 10% unlocked after IDO;13,000,000 KINE13%
Private-sale participantsSold at $0.50 - $1.00Tokens are vested; 25% unlocked after IDO12,000,000 KINE12%
Team and advisorsThe Team helps launch the initial version of Kine Protocol and future upgrades.Tokens are vested; Unlock begins 6 months after IDO; see release schedule below.20,000,000 KINE20%
Liquidity partnershipStrategic market liquidity providers with mandates to maintain orderly secondary markets for KINE, kUSD, and related underlying.Tokens are vested in 12 months; 25% unlocked prior to initial listing;10,000,000 KINE10%
Ecosystem GrantEcosystem Grant with the mandate to grow and promote Kine Ecosystem.Tokens are released over a period of no less than 48 months; further details to be announced.40,000,000 KINE40%

Security Audits

Kine Protocol is an audited cryptocurrency organization, which has gone through the security test conducted by PeckShield Inc. PeckShield Inc is a leading blockchain security company with the goal of scaling the security, privacy, and usability of the current blockchain ecosystems by offering top-notch, industry-leading services and products (including the service of smart contract auditing), even as carried out for Kine Protocol. Kine ecosystem, having undergone certain proceedings with several independent audits and a public bug bounty program to ensure the security of its smart contract(s), strongly advises users that this security audit should not be used as investment advice.

Supports & Partnerships

Kine Protocol is actively supported by a total of 20+ value-adding organizations and/or individuals ranging from Blockchain pioneers to DeFi (Decentralized Finance) companies, and digital Fintech investors. KineProtocol has described these companies or individual investors as its early supporters.

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Kine Protocol

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Edited On

October 4, 2022

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