Kine Protocol is a decentralized exchange platform built on Ethereum. Its customizable, ERC-20 collateralized liquidity pools allow the trading of derivatives for any asset — crypto and non-crypto — with up to 100x leverage. KINE is the name and ticker symbol of the protocol's native ERC-20 token, used for staking and governance.
The project was inspired by automated market maker protocols like Uniswap and Compound. However, the single asset liquidity pools favored by these projects are not well-suited to the trading of derivative contracts.
Instead, Kine Protocol introduces multi-collateral pools. Users can form their own collateral portfolios from the assets supported. Staking assets allows users to issue kUSD — Kine's own synthetic stablecoin. This provides a common currency in which all trades on the platform are settled.
The team behind Kine is focused on improving the user experience of the decentralized finance sector. The protocol borrows synthetic funding rates and auto-deleveraging features from centralized trading venues, along with a high-performance price oracle, to provide users with the kind of functionality expected from CeFi platforms, but that is still largely absent from DeFi.
Kine also reduces its users' gas expenditure by running its trading engine off-chain. Its documentation claims that the current version can simultaneously support up to 10,000 traders and more than 4,000 transactions per second. There are also plans to move the protocol's off-chain elements to an Ethereum Layer-2 scaling mechanism so that the entire protocol eventually exists on the blockchain.
KINE has a fixed total supply of 100 million. Of this, 5 million tokens were distributed via a Balancer Liquidity Bootstrapping Pool in early March 2021. Private sale participants, seed supporters and the team itself received 13%, 12% and 20% of the total KINE supply, respectively. Finally, 50% of the allocation was designated to fund ecosystem grants and liquidity partnerships.
With a finite supply, demand heavily influences KINE price. Driving demand for the token is the platform's governance structure and the possibility to earn trading fee rewards by staking KINE. Since derivatives volume often dwarfs spot volume in the traditional financial industry, demand for KINE may be high if the protocol proves popular.
Adding to the KINE price equation's supply side are those tokens held by early investors and the team. However, these are locked for a period of between six and 48 months, reducing selling pressure. If KINE buying outweighs selling, the token's price should increase.
Kine Protocol was founded by Lei Wang — a computer scientist and chartered financial analyst with more than 15 years of experience in the investment banking sector. Credited as the project's co-founder is Lewei Li, who previously worked at Citi Hedge Fund.
The rest of the team behind the project has impressive experience in the traditional financial industry. Members formerly held positions at Merrill Lynch, HSBC and other financial institutions.
In March 2021, Kine Protocol concluded a $7 million seed round led by Alexander Pack, a former managing partner at Dragonfly Capital, and Naval Ravikant, the former CEO of AngelList. Among those contributing to the sale were OK BlockDream Fund, SevenX, Ascensive Assets and CMS Holdings.