KIP #6: Increasing the Maximum Cap of KUS Tokens

This proposal seeks approval from the KuSwap DAO (KUSGOV) to increase the maximum cap of KUS tokens from the current limit of 47 million (47M) to 80 million (80M). This revision incorporates feedback from the community and addresses concerns raised regarding the previous proposal (KIP #5).

Objectives and Justification

1. Addition of New Liquidity Pools:

   • Rationale: The integration of BTC and ETH pairs (BTC-KUS, BTC-KCS, ETH-KUS, ETH-KCS) will attract more liquidity providers and traders, leveraging Bitcoin and Ethereum market dominance to enhance trading volume and user adoption on KuSwap.
   • Expected Impact: These pairs are expected to increase the platform's total value locked (TVL), thereby enhancing the overall liquidity and trading experience for users.

2. Maintain Competitive Yields:

   • Rationale: Maintaining competitive yields is essential to incentivize liquidity providers (LPs). This will help retain existing LPs and attract new ones, ensuring continuous liquidity provision for trading pairs.
   • Expected Impact: More participation in the ecosystem, particularly in the Liquidity Pools.

3. Expand KuSwap's Ecosystem (Multichain):

   • Rationale: The community expressed their concern about dilution and suggested several ways to balance this such as increasing token utility. The KuSwap team, in response to this, proposes that instead of the proposed utilities such as staking for portfolio management, or other utilities to drive adoption on the KCC side, it would be best to expand KuSwap through another protocol on another chain.
   • Expected Impact: Deployment on another chain diversifies KuSwap's reach and opens up new avenues for growth.

Implementation Plan:

• Gradual Emissions: The increase in the maximum cap of KUS tokens to 80 million will be gradually implemented through emissions.
• New Liquidity Pools: Tokens will be allocated to incentivize initial liquidity provision for new BTC and ETH pairs.
• Deployment on Another Chain: This topic is vast and complex enough to warrant its own set of governance proposals, so we decided to split it into three parts.
  • Part 1: veKUS Airdrop - since it directly benefits veKUS and in part, operates as a justification for increasing the tokens as outlined in this proposal, we have decided to include this part in KIP#6.
  • Part 2: Chain (KIP#7) - following the passage of KIP#6, we will immediately gather information so the community can express ideas and suggestions on which chain to start our multichain future.
  • Part 3: Exact Allocation (KIP#8) - see Budget and Financial Implications.

Budget and Financial Implications:

• Total Tokens to be Minted: 33 million KUS tokens (from 47M to 80M)
• Allocation Breakdown: All to emissions
• Emissions Schedule: No change
• Percentage of new chain tokens to be distributed to veKUS holders: 3-5% (The exact percentage allocation will be determined in a separate proposal, KIP#8, factoring in vesting periods and distribution strategies.)

Community Engagement:

• Discussion Period: 3 days (72 hours) for community questions and feedback on the Kuswap Telegram.
• Voting Period: 24 hours for community members to cast their votes.

Conclusion:

Raising the maximum cap of KUS tokens, along with the proposed ecosystem expansion and veKUS allocation, represents a strategic move to enhance KuSwap's liquidity, incentivize participation, and solidify its position in the evolving DeFi landscape. We urge the KUSGOV DAO members to vote in favor of this revised proposal to drive the platform's success and ensure its long-term sustainability.

Thank you for your consideration.

KuSwap Development Team