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Kine Protocol currently will support ETH, USDT and mainstream ERC20 assets like WBTC, USDC. Also we will support KINE staking shortly after our full release. More assets that we consider safe and stable will be listed in the future.
Trading fees and fundings collected by Kine Exchange will be distributed to the liquidity pool's stakers. The exchange will accumulate incomes in kUSD, and convert it into KINE tokens through 3rd-party DEX such as Uniswap.
Stakers can periodically claim their rewards from the distribution contract.
Assets staked into the contracts increase the user's debt limit. The debt limit equals staking asset's market value times Collateral Factor.
Users with unused debt limit can mint kUSD, a synthetic USD-pegging digital asset backed by the liquidity pool. kUSD is the only asset accepted by Kine Exchange, a peer-to-pool derivatives trading platform providing multi-asset exposure with zero-slippage trading experience.
Users incur a Multi Collateral Debt (MCD) when they mint kUSD. 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.
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.
Stakers act as a pooled counterparty to all traders on Kine Exchange and take on the risk of MCD price movement. When the liquidity pool incurs a trading loss, the MCD price rises and the debt values of all stakers increase proportionally; alternatively when the liquidity pool posts a trading profit, the MCD price falls and debt values decrease. The stakers have the option of hedging this risk by taking positions external to Kine Exchange
Also, 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 of 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.
Max mint = StakingValue * CollateralFactor * LiquidationProtection
Say a staker staked 1 ETH at price 4000 USD, he/she will be able to mint 4000*0.8*0.8 = 2560 kUSD
Below is the CollateralFactor&LiquidationProtection for each staking asset.