Relationship between KCC and Klein Finance
Singapore, June 28, 2022 – KCC (KuCoin Community Chain) is a public chain developed by fans of KCS and KuCoin based on Ethereum. And Klein Finance is the first DEX (Decentralized Exchange) on KCC that concentrates on stablecoins and long-tail market transactions. It is designed to serve large-scale transactions of tokens including stablecoins, featuring security, stability, low slippage, high depth, and low transaction fees, and provides users with liquidity incentives. In a word, Klein Finance is a DEX on KCC.
The Advantages of DEXs
DEXs have unique advantages over traditional CEXs, so the whole DEX industry is currently experiencing vigorous development. MojitoSwap is currently the top tier DEX in KCC public chain with the largest TVL scale (45.7 million USD till 24/06/2022). However, due to the booming demand for DEX, a single Dex on the public chain cannot satisfy the diverse and complex needs of customers. Only through the DEX product matrix, can major public chains establish a comprehensive virtual asset trading service that can meet customer needs, to strive for the part of users that overflows from CEX.
AMM mechanism (Dynamic peg) — Klein Finance
When evaluating the quality of DEXs, there are two key elements: liquidity, and slippage. The liquidity of certain DEX is positively related to its TVL, which can be realized by acquiring more users, increasing locked digital assets, improving the liquidity of platform assets, and realizing a positive cycle. So when the total available digital asset providing liquidity is fixed, the AMM mechanism (Dynamic peg) will be essential cause it affects the liquidity distribution of specific trading pairs. Klein Finance provides an optimized mechanism to create a cross-market tunnel for stablecoins. The immutability of Klein Lab allows most of the liquidity to be concentrated around the $1.0 price (or any real price). This is a very useful feature for creating liquidity between stablecoins and is more efficient than the traditional calculation method of m*n = λ. It can ideally create 5-30 times higher liquidity than other exchanges, and provide liquidity to provide higher profits.
The Feature of Dynamic peg AMM
The most notable feature of Dynamic peg AMM is that it can concentrate most of the liquidity of stablecoins near the “equilibrium point”. As most of the transactions are conducted near the “equilibrium point”, in most cases, liquidity is only “effective” with certain price ranges. Compared with the AMM of MojitoSwap, Klein Finance can provide more than 20 times “effective liquidity”. In short, the Dynamic peg AMM does not rely on external oracles to achieve the “equilibrium point” but relies on the transactions within the traditional AMM system until the system reaches equilibrium.
Compared with non-stablecoins, investors have a much lower tolerance for slippage of stablecoins because the stablecoins are regarded as “relatively fixed to the anchor”. The greater the volatility of their prices, the greater the crisis of user confidence in them. In other DEX, the relative price of two currencies is determined by relative volume, causing the price to deviate from “fair value”, causing large slippage.
The Development of DEXs
From the perspective of the development of the entire industry, outstanding DEX is the infrastructure of the public chain and is essential to the ecology of the public chain. KCC is still in the stage of vigorous development, so more comprehensive and stable DeFi applications are still needed to enrich the user experience and improve the ecosystem.
Follow Klein Finance