Introducing KogeX: a Bonded Liquidity Swap and Bridge
Update: KogeX has been postponed due to market conditions surrounding Olympus DAO forks.
Bonding (3,3) as introduced by Olympus DAO is now all the rage. Many think that this will be the new way through which protocols attract and manage treasury assets. In the sense that yield farming, which KogeFarm excelled in facilitating, can be characterized as Defi 1.0, bonding has often been called Defi 2.0.
While Olympus and its forks were excellent at attracting treasury assets, as shown in the above graph, they have the problem that the liquidity bonded to it serves no purpose other than as a price floor for their token. This is where KogeX comes in: we will build the first DEX and bridge with the treasury assets, so that the protocol will earn sustainable income from trading and bridge fees, which will lead to higher APYs and a price floor that keeps on rising.
The trading and bridge fee income will help provide sustainable APYs. For example, OlympusDAO currently has a APY of 7,266%. If, in addition, KogeX can generate a 100% return from trading and bridge fees, we’d boost that APY to 14,532%. If we can generate a 50% return, we’d boost that APY to 10,899%. To the extent that generating high, sustainable, APYs is attractive to investors, KogeX will become one of the most attractive bonded liquidity protocols.
Our innovation is to use bonding as a way to attract liquidity for our DEX and bridge. Why is this the right way to build a DEX and bridge? The answer is simple: stability. All DEXes today face a constant pressure to keep their yields high and TVL up, but that can be unsustainable without an infinitely growing market. Once yields on a particular project fall, liquidity providers leave for a different project, and that leads to a never-ending chase for yield. With bonded liquidity, once LPs are provided to the protocol, they are owned by the protocol, so users and investors can feel secure that the DEX and bridge will last forever. This stability has real value to users, developers, and investors.
The KogeCoin DAO has voted for the team to build a DEX and bridge, and we spent a long time thinking about how to make it fit into the project and find resources to build it. With the growing popularity of bonded liquidity projects, KogeX is our answer.
How will this benefit KogeCoin? In two main ways:
- One of the first pairs we will allow people to bond to earn the KogeX protocol token is the KogeCoin-Matic LP pair. This will increase APRs for the existing KogeCoin-Matic farm for QuickSwap LPs and increase buying pressure on KogeCoin. Furthermore, it will ensure that liquidity for KogeCoin will last forever on our new DEX.
- When we launch our bridge, we will also allow KogeCoin to be bonded to the protocol so that people can bridge. This will reduce the circulating supply of KogeCoin and (hopefully) increase its price.
There are likely other ways KogeX will add value to KogeCoin. A tight integration between the two projects will mean that if KogeX is successful, we can find other ways to make it add even more value to KogeCoin.
As this is a relatively new undertaking, we welcome all comments and feedback (can be directed to team in Telegram/Discord) as well as ideas for the name.