Happy to finally unveil the Kyber Community Pool (KCP) – a "community first" staking pool!
— Kyber Community Pool (@KyberCP) June 25, 2020
For those who missed it, Katalyst marks the migration of KNC to a governance token which fuels the KyberDAO. The exciting part about the KyberDAO is that KNC tokenholders are eligible to receive ETH rewards for participating in discussion regarding how DEX fees are allocated across the wider Kyber ecosystem.
Given the notion that voter apathy is a common issue among governance systems, the ability to earn rewards in an exogenous asset like ETH provides a strong signal that Kyber could very well be one of the most active DAOs to date.
As if that wasn’t enough, yesterday’s announcement of the Kyber Community Pool is a perfect example of how non-technical users can capture the upside of governance participation by delegating their voting weight through an intuitive dashboard.
What’s To Know?
Built by one of DeFi Rate’s contributors – DeFi Dude – with help from Sasha Tanase and Wayne Chang, the Kyber Community Pool is essentially a way for KNC tokenholders to delegate their voting power to top members of the Kyber community.
Unlike other Pool Masters which are likely to incur a reward fee for their governance role, the Kyber Community Pool takes no fees from those who delegate. What emerges is a Pool Master which is sure to vote on 100% of polls – thus earning a high share of the rewards – while voting with the community’s sentiment in mind. Plus, with this specific framework, small KNC tokenholders benefit from fewer transaction fees as they simply need to deposit and withdraw, rather than having to sign each and every vote.
“With the community pool, the vote will be directly impacted from the community outlook/sentiment towards the current poll, and will never vote in a way that harms the community or vote for something the community is strongly against, while still giving them the money they want. I think this is super super important in the world of decentralization and on-chain governance.” added DeFi Dude.
While only time will tell if this sentiment holds true, the underlying premise of staking KNC to earn a constant stream of ETH rewards is incredibly powerful in and of itself. Plus, given DeFi Dude’s long-standing reputation in the wider DeFi ecosystem, we have full faith that these words are well-intention and will be adhered to in the best way(s) possible.
“The community of a project is sometimes its most valuable asset, and we think their voice should have a noticeable impact in the governance of Kyber. A whale’s vote should not hold all the power.”
Well said DeFi Dude. Well said indeed.
Governance Participation Framing
The launch of the Kyber Community Pool introduces an interesting paradigm which we’re seeing across numerous other governance systems. While DeFi governance tokens have quickly become the hot new topic in crypto, it’s interesting to consider whether or not people have actually shifted their sentiment to caring about protocol voting or not.
What I mean is that the reason governance tokens have become so hot is the fact that they are mooning in value – not because the government itself has created any tangible change in user influence.
Even in this case, average joes participating by delegation is an awesome first step. However, it’s worth noting that more of the supply being pointed towards governance weight does not necessarily correlate to those same individuals caring about that conversation.
Without this getting too contrarian, I challenge any project building a governance system to consider what distributed governance truly enables and trying to focus on that conversation more so than ‘number go up’.
Regardless, yield farmers such as myself could not be more excited for the upcoming Kyber plantation. You can bet your tractor that DeFi Rate will be one of the first Pool Masters entering the discussion and we look forward to earning your vote!
Cooper is the Editor of DeFi Rate. He is an ambassador of Set Protocol and an active contributor to MetaCartel where he seeks to find emerging consumer-facing applications that propel the Ethereum ecosystem. He often works with projects as the Director of Fitzner Blockchain Consulting where he coauthors the weekly publication Token Tuesdays.
Like my writing? Drop me some gwei @ coopahtroopa.eth 😉