Quick Look at Kyber Network's First Upcoming Protocol Vote

DeFi Jul 12, 2020

We got invested into this one a little while back in the Discord / Riot (again, paper trading - real financial decisions should be made on your own or with an actual financial advisor).

Recapping Our Kyber Network Decision

The statements above are pretty ambiguous, so we decided to double down at the beginning of this month (circa July 2nd / 3rd).

So let's say we're "in" at $1.52.

Checking Up On the Current Price of Kyber Network

At the of writing, $KNC's price is locked at $1.64:

Total ROI

By our calculations we're at approximately +8% (delta) and climbing - which is far from an astronomical reward of any sort, but we are looking toward the horizon to see what Kyber Network may have to offer us in the near future.

Recent Kyber Network Announcement

By sheer chance (I suppose), I came across the following message in their Discord (which was blasted numerous times).

The message, as posted, is pasted below:

For those that would prefer to have the 'raw text' in front of them vs. a screenshot, see below:

"Hi @everyone , Epoch 1 i starting in ~2days! To prepare for our first proposal on the KyberDAO, you are highly encouraged to read this Github document: https://gist.github.com/mingyeow/5ef4380f75d4b368d8fa8ea61666c13c
Key points on BRR-1
  1. There will be a perpetual Burn/Reward/Rebate (BRR) proposal process to decide the network fee % allocation options in every Epoch.
  1. The first BRR Proposal (BRR-1) will go live at Epoch 1, starting in 2 days, 14th July.
  1. We have devised a starting framework for changes to the fee allocation. BRR-1 voting options are based on this framework.
  1. In addition, we will be designing a separate Kyber Improvement Proposal (KIP) framework. KIPs are unique proposals, and won't be as regular and straightforward as BRR proposals, which will likely happen in every Epoch.
  1. The community is highly encouraged to discuss ALL KIPs and BRR proposals (and even the process itself) here on Discord."

That same community leader went further to suggest that Kyber Network had already received > $24 million in committed / 'locked' funds already.

The message above is an exact duplicate of the one that we just covered - the only difference being that this message was sent into a different channel (in the same Discord), and this one includes the extra tidbit about $25 million being staked on the platform now (versus no mention of such in the other message).

DeFi Pulse Shows Different Currently

If you're unfamiliar with the site - when we say 'defipulse', we're referring to https://defipulse.com.


Defipulse.com provides rankings for all DeFi projects from top to bottom by total amount staked on the protocol.

Below is a look at what the site was reporting at the time that the Kyber Network moderator / community leader was promising $25 million was pledged on the platform "already" in anticipation of the new protocol fee model voting process, which is slated to begin on July 14th (according to Kyber Network):

Contrary to what was stated in the Kyber Network Discord server, DeFipulse reports that there is only $7.2 million "locked" on the protocol at the time of writing, thus placing Kyber at #18 among all DeFi protocols (ranked by amount staked / locked on each).

Committed to the Spirit of Due Diligence

Since there's such a discrepancy between what 'Defipulse' is reporting and what was stated in the Kyber Network discord chat - we remained open to the possibility that perhaps we were misinterpreting the metrics that we were looking at.

So, in order to confirm that this was / wasn't the case - we tagged the community leader directly in the chat to gain more clarification on what he meant with his "Already $25M in KNC staked!" quote.

Below is the ensuing dialogue:

All things considered, this answer feels plausible.

Fortunately, 'DeFiPulse' Allows Us to Isolate Results For Only 'DEX' DeFi Projects

See below:

As we can see above, Kyber is at the bottom of that list - but perhaps this new protocol proposal voting process that is beginning will serve as a catalyst to change all of that.

Voting Options

With the whole 'staking amount' put to the side, let's look at the actual 'voting options' that are available for users on the Kyber Protocol (see below):

(screenshot above obtained from the Kyber Network Discord Server - once again).

Curious About Which Options the Community Was Favoring at the Time of Writing

Surprisingly, I received a response to this (Shane isn't a half bad community leader, right?).

See his response below:

If the pre-vote results were to hold (which we have no clue how likely that is), then the network would choose to remain with the "status quo".

However, coming in at a close second, is the "Pro-Burn" (which provides different parameters in the poll provided by Shane than what we see in the screenshot presenting options that will actually be eligible for vote starting July 14th).

Conclusion - This Should Have Some Potential Positive Impact on Kyber Network

Typically, this voting process is an opportunity for the network to shift the parameters of the lending / borrowing / margin percentages in their perceivable favor (versus what was in place before).

As we've seen with other protocols (i.e., $COMP being the biggest example) - such votes can have a massive impact on the protocol itself (as well as any affected coins - like $BAT, for instance after the first protocol vote adjusted borrow / loan percentage amounts).

However, This is All Contingent on an Actual Change

It is unlikely that there will be any noticeable exchange in price action for Kyber Network if the network votes to retain the 'status quo' (i.e., leave things as they are now).

Again, there's no telling what will happen and the vote does not start until July 14th. So we'll drop back in around then to get a better 'pulse' on the situation.



Happy to serve and help wherever I'm needed in the blockchain space. #Education #EthicalContent #BringingLibretotheForefront

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