Dear Community,
Thanks all for participating in our Konomi Network AMA. We really appreciate all your support. There were really good and thoughtful questions that were asked. For those who missed our AMA, this blog post is for you.
Introduction!
Mayank – Hello @yige910627 welcome to CryptoNationIN 🥳 Glad to have you here 😃
Jayden – Hi guys great to be here to share our project. Thanks!
Mayank – Before we start, I request you to tell about yourself.
Jayden – Hi everyone, this is Konomi’s COO Jayden. I have been working in Singapore after graduating from the National University of Singapore with a major in electronic engineering, I used to be OFO’s regional manager in Singapore, responsible for OFO’s expansion and operations in Singapore. Later I founded Mileslife, A technology startup company that used technology to improve the efficiency of the tourism industry. I have been interested in blockchain and Bitcoin since 2015, so I participated in Bitcoin mining and ICO investment in the early stage. At the beginning of 2020, I felt that DeFi has really brought application scenarios to the blockchain, so I joined the Konomi project founded by several NUS alumni. Currently, I am responsible for the operation of the project and business development in China. Most of our team members are still based in Singapore and the focus of the project was mainly on development. With the improvement of our product development progress, the project has also recently received a grant from the Web 3 Foundation, and we have also begun to speak out in the market. I am very happy to communicate with the community here.
The vision of Konomi at the beginning of its establishment was to enable financial applications on Ethereum to seamlessly connect to the Polkadot ecosystem, and to provide the users with a complete asset management experience – from liquidity protocols, to lending market, as well as the management of ecosystem assets. Polkadots has more application scenarios which are different from Ethereum in terms of governance and parachain auctions due to its better base layer performance. As a result, we believe that Polkadot-based financial applications will also have more opportunities than Ethereum. Thus, at the initial stage of our product design, we first built the underlying facilities which are decentralized liquidity protocol and lending protocol.
Mayank – What an elaborative introduction 😃
Jayden – Thanks. I hope to have more interactions with the community here in future.
Mayank – Could you please tell about the use cases of Konomi?
Jayden – KONOMI is targeting crypto users that are looking into investing, trading and managing assets in an efficient way. It is currently deployed as an independent blockchain using the Substrate framework. At launch, it will support functions in trading, deposits and lending. As the Polkadot parachains are launched and that interchain communication protocols are live, Konomi could support more financial products specific to the Polkadot ecosystem.
Interaction between cross-parachain applications: Different parachains will use their own native tokens as the cost measurement of system applications, such as gas fees, service fees for calling services etc. Due to the completion of the XCMP protocol, the cross Parachain message passing is possible, and there is more space to support cross-application collaboration. Konomi’s decentralized liquidity protocol allows users to seamlessly use applications on different parachains without the need for repeated exchanges of different tokens on centralized exchange. In the future, when the asset ecology on the parachain becomes more mature, we can support instant token exchange-just like spending credit cards overseas, there is a default settlement currency.
Mayank – Could you tell our community about the differences between Konomi and other lending projects?
Jayden – I will compare Konomi with a few current Defi lending project.
1) Match lending: dYdX, Dharma, etc.
Let’s take dYdX as an example for match lending. An obvious feature of the dYdX platform is that it requires both the borrower and the lender to exist at the same time and the amount of loans and borrowings has to be equal for matching to take place. Therefore, the shortcomings are also obvious, it is unable to respond to demand in a timely manner, and transaction efficiency is low.
2) Loan only mode: MakerDAO
MakerDAO is an old DeFi project on Ethereum, with ETH and DAI tokens in its fund pool. The user lends the stablecoin DAI issued by the MakerDAO platform through mortgage of ETH, but users cannot lend personal assets on MakerDAO. MakerDAO’s lending function is relatively simple and cannot meet most market needs.
3) Liquidity pool lending: Konomi, Compound, etc.
Compound’s liquidity pool lending is much more optimized than the above-mentioned lending model. The most unique feature is that the supplier and lender can be regarded as two liquidity pools. The borrowing demand is carried out in the liquidity pool, and the borrowing interest rate and collateral value are automatically adjusted according to market demand through smart contract algorithms. Konomi not only inherits the advantages of the Compound liquidity pool lending mechanism, but also makes it possible to provide lending services for the entire encrypted asset market based on the characteristics of Polkadot’s cross-chain transaction. So the above mentioned projects are basically Ethereum based so I would also like to compare Konomi with some Polkadot lending projects.
Let’s compare with Acala and Equilibrium which are Polkadot based on lending projects.
Acala mainly provides stable currency lending services for the Polkadot network. Similar to MakerDAO’s DAI, Acala also has its own stable currency aUSD, which is also secured by encrypted assets as collateral. If Acala develops well in the future, Konomi will also establish a connection with it to improve the liquidity of the stablecoin in Polkadot ecocosystem.
The Equilibrium is launched by the EOS stablecoin team aims to build a cross-chain token market for Polkadot, and its official business direction is indeed similar to Konomi. However, under the funding of the Web3 Foundation, the development of this project was mainly focused on the data analysis of DeFi asset volatility and value at risk, and the function of the lending sector was relatively lagging.
Polkadot-based Konomi has more advantages in this regard, as interest rates update faster and the curve is relatively smoother. Konomi currently adopts a mortgage lending method, which requires users to over-collateralize. With the improvement and promotion of the DID decentralized identity infrastructure, Konomi will also design a set of reputation mechanism to reduce the burden on mortgages for users with good reputation. The Konomi lending sector is also fully compatible with Polkadot’s cross-chain ecology. Through cross-chain messaging (XCMP), all parachain assets and bridge chain assets can interact with Konomi, and its community users can also enjoy more free lending services. In that sense, I would say Konomi is a unique GEM in the ecology for now.
Mayank – What is the current stage of Konomi’s product development? Is there an approximate time for the official launch?
Jayden – Konomi’s technical design mainly has five components. The first two components have been completed. They are the asset components including an AMM module which is similar to Uniswap’s asset exchange protocol that supports users to perform asset exchange, add and remove liquidity operations and lending module that support multiple assets. In addition, the lending component will be launched before the end of this month. This is the key and unique aspect of Konomi, and it will support various types of lending pools. The user can mortgage assets in these pools to earn interest. If the users have enough collateral, they can also borrow other assets in the pool while paying some interest. The remaining governance components and oracle components will be completed in Q1 next year. The official launch time of the product is also closely linked to the launch time of the Polkadot Parachain. In addition, we will launch our testnet and open a faucet for users to try our current functions by the end of January.
Mayank – Will Konomi have a public sale plan? How one can get tokens in the fastest way in the early stage?
Jayden – I know many users are concerned about it. However, Konomi does not have a public sale plan at the moment, but in Konomi’s economic model, a large part of the token is used as incentive for the platform users. Therefore, users will receive token rewards for providing liquidity on the konomi platform and deposit DOT assets on the platform when the product launched. Of course, Konomi token will also be listed on major exchanges, and some market incentive plans will also be implemented. Please pay attention to the official community and get project related information as soon as possible.
Mayank – Thanks for an elaborative introduction.
Twitter Questions
Q1. What are you most excited about on the roadmap of 2021?
Jayden – We have a series of development plan for 2021 including developing governance module, risk management module, integrating oracle etc. The most excited part should be the integration of SWAP module and lending module which we have completed development as it will enable leverage trade which make Konomi different from other Defi projects.
Q2. How does the network developed by KONOMI plan to provide money markets for assets in the Polkadot ecosystem? What will be the first assets that will be part of this model? What types of markets will you create for them?
Jayden – We start from lending but I believe we will derive more application scenarios as parachain launch. We would also like to on partnership with other Polkadot projects to derive more application scenarios. At the beginning of our launch, we will firstly support mainstream assets like DOT but we will support ERC20 assets when cross chain transaction is available later this year and that’s the beauty of Polkadot and why we develop our projects on Polkadot. On top of that we will issue our native token KONO.
Q3. For the second quarter of 2021 you have planned the launch of the governance function. What kinds of decisions can users make within the Konomi ecosystem?
Jayden – The design and implementation of the protocol would be determined by token holders. For parameters like pool staking fees, transaction fee burn, liquidity mining ratio, are initially set by the protocol itself; token holders could update the numbers and the smart contract itself based on the voting process. In order to encourage users to participate in the process, there could be some profit set to reward the voting participants.
Q4. I understand that Konomi Network will participate in the Polkadot Parachain Slot auction. Can you share some details with us?
Jayden – Konomi will definitely go for Parachain slot auction. I think it will be very competitive at the beginning and the cost will be very high but the cost will drop gradually as more parachain launch. We have reserve a significant amount of token for auction. It will be used to reward DOTs holder who have supported us for the auction. On top of that, we will develop a crow-funding module for the upcoming auction.
Q5. Why do you think $KONOMI token is necessary for your project? What is the main role of $KONOMI in your project?
Jayden – Ok let’s talk about the token utility. I have mentioned previously that our token can be used for decentralised governance. There are other functions which I will elaborate a bit more.
User incentives
As a decentralised product, getting liquidity is crucial for the user experience and platform adoption. Therefore, a large proportion of the Konomi tokens are reserved to encourage users to add liquidity to the platform and to use the products. By depositing assets to the protocol, users could automatically market make for the protocol. In designing the user incentives, the protocol also takes into consideration the long term sustainability of the token. As there are more liquidity mining programs launched by DeFi protocols, users tend to participate in those programs in order to earn tokens rather than to fulfil their true needs. In the meantime, as more tokens are generated, there is continuous selling pressure to the network if no strong use case is designed to create demand for the token. Therefore, in designing the liquidity mining program, priorities would be given to long term supporters and market makers for the protocol.
Asset staking
Konomi token could be staked to participate in the base layer consensus and earn system rewards. It is also the staking currency to share platform revenue and ensure that the debt positions are safe.
Telegram Questions
Q6. A good amount of $KONO are destined to “users Incentives” so can you explain how many Incentives or revenues plans do you have to your users?
Jayden – Thanks for reading our article and deck. The ‘good amount ‘is 15% of the total reserve.
Q7. What are the risk management policies that #KONOMI uses to safeguard the investments and credits granted by its platform? How do you really ensure that there is a backup base to rely on in the face of any situation or sudden change in the commercial markets?
Jayden – Risk management is always the top priority for any finance project regardless of Cfi or Defi. We are in the midst of developing our risk management modules which will including functions like auto liquidation to safeguard our user from huge fall of the market.
Q8. At this point, do you think you need exchanges as a binance to keep growing? Or is it better to forget those things and focus on other activities?
Jayden – I will say both are important for us. However, project developing is always our top priority regardless of which exchange we are going to list. However, we are confident that we will be listed by Q1 on tier 1 exchange.
Thank you to Jayden Antonio (COO) and Community for participating in the AMA. Have a nice day.
