According to Q2 2020 Katalyst protocol update, Kyber is implementing a dynamic token model where profits can be allocated in 3 different ways.
2. Distribute to active token holders.
3. Accumulate profit in LP pool.
Protocol update means that: Liquidity providers (“reserve managers”) do not need to hold KNC to earn fees. Currently, LPs need to maintain a KNC balance for fees.
Dapp integrators using Kyber’s API can set their own take rate on Kyber’s network fee.
Currently, Dapp integrators get automatically 30% of 0.25% Kyber’s network fee.
KNC Holders get protocol earnings thru burn AND/OR for staking. Currently, KNC holders are rewarded via burn. 70% of the 0.25% network fee is burnt in KNC.
After the upgrade, KNC holders vote on WHAT PORTION of profits will be:
1. Paid to active KNC holders (only active participants share profit – case Augur;
2. Burnt (all token holders share profit – case MakerDAO
3. Left in pool (distributed to LPs – case Uniswap.
In a well-designed protocol, tokens give their owners both economic and governance rights, similar to traditional company shares.
March 11, 2020
| Ethereum News