Today, we are excited to introduce Kine, a new decentralized derivatives protocol. We are thrilled to be building a fast, transparent, and effortless way to trade derivatives on Ethereum.
We’re also excited to announce a $7M financing round led by Alex Pack and Naval Ravikant, with participation from SevenX, Ascensive Assets, OK BlockDream Fund, CMS Holdings, Spartan Capital, Blockchain Capital, NGC Ventures, Origin Capital, Krypital, Taureon, Divergence, Defi Alliance, A195 Capital, Honglian Capital, PNYX, MGNR, TRG Capital, Gestalt, BlockSync, Hypersphere, Kosmos, Moonrock Capital, 3Commas, Lotus Capital, BGain, Bixin Ventures, @LeiFeng, Waterdrip Capital, Spark Digital, Puzzle Ventures, Vector Capital, Onemax Capital among others.
Our team has been in the derivatives business for years. Most recently, our founders led Huobi’s institutional business, one of the largest crypto trading businesses in the world. Prior to crypto, our team spent the past 5 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.
Why did we decide to go all-in on DeFi? We spent the past 2 years learning and participating in the space and are convinced that DeFi will disrupt not only CeFi but the entire financial system. Having witnessed pioneers like Uniswap and Compound revolutionize token trading and lending, we think it’s finally time to do the same to the derivatives market.
The Kine Platform
In the traditional financial markets, derivative trading volumes far exceed spot. We believe that this is inevitable in DeFi too, assuming that the right infrastructure is built. This is where Kine comes in: a derivatives trading platform where any asset, crypto or non-crypto, can be traded with up to 100x leverage. Kine offers traders a CeFi-like trading experience, complete with low gas costs and significantly better economics for liquidity providers.
To design the Kine Exchange, we started with a peer-to-pool model (e.g. peer-to-smart-contract), popularized by protocols like Compound Finance and Synthetix. We spent months identifying all the possible shortcomings to the model when applied to the decentralized derivatives market. We then designed and implemented novel solutions based on our learnings from TradFi and CeFi. Here are some of our biggest improvements:
More Tradable Assets: the AMM (Automated Market Maker) 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.
CeFi-Like Trading Experience: Compared to top centralized solutions, DeFi derivatives protocols are a strictly inferior experience. For one, traders usually suffer much higher slippage. Kine solves this with the guaranteed liquidity of the peer-to-pool model. In addition, Kine incorporates synthetic funding rates and auto-deleveraging features from CeFi that enable it to offer up to 100x leverage and cross-margining.
No Front Running: Pure L1 trading protocols on Ethereum suffer from toxic front-running that takes advantage of the delayed price oracles, and sometimes leads to massive losses for 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, we will move our off-chain engine to a high-performance L2 rollup so that the entire trading experience exists fully on-chain.
With the Kine protocol, DeFi will be taking a giant leap forward:
· Ethereum will now have a derivatives market supporting limitless synthetic assets that millions of traders can use.
· The gap between the DeFi trading experience and the CeFi trading experience for derivatives will be cut to zero. DeFi will have the same functionality as leading CeFi trading platforms.
· As a result, more and more traditional crypto traders and even non-crypto traders will be on-boarded into the DeFi ecosystem.
Welcome to the Kine Herd
After months of research and development, our team is thrilled to unveil Kine Protocol. Both the on-chain staking and off-chain trading components are built, tested and ready to launch.
But a next-generation market is more than just pure technology. It will take a strong global community to grow this protocol together, and we want your support. In the next few weeks, we will be announcing a public token offering, token distributions to our early supporters, and our mainnet launch.