Simple Summary

The KSX token will be minted by the treasury and issued via a liquidity event.

Abstract

The treasury will use $2M USD worth of KWENTA tokens to initiate the genesis of KSX. These tokens will be pooled and distributed in a restricted Camelot LBP event to bootstrap liquidity and fuel operations. Eligible wallets will have access to a small amount of KSX that can be purchased for additional incentives.

Motivation

A liquidity-rich environment will position KSX to be favoured over the KWENTA token by LPs, traders, and DAO members. The KWENTA token will continue to be operational for those who wish to capture revenue directly, however, KSX is better suited for a multi-chain landscape and ultimately reduces overhead which comes with staking for the DAO.

The event is being proposed to enable a wide distribution of the token without exhausting local demand and immediately offering significant liquidity for the market. Pyth token has been paired as an additional incentive aligning participants with Kwenta and Pyth.

Specification

The Kwenta treasuryDAO will wrap $2M worth of KWENTA into KSX using the mechanism outlined in KIP-125.

These tokens will be pooled for a liquidity event in Camelot where participants can purchase KSX for the equivalent spot price of KWENTA with 1,322,803.81 additional PYTH tokens streamed to participants over a three-month unlock period using Superfluid. The amount of PYTH approximates 25% of the value of KWENTA at current prices, offering an attractive 100% annualized yield for participants. Users who exit their KSX position during this period will not be eligible for the streamed Pyth, the remaining PYTH will be distributed to those that continue to participate.

Traders who did $1m in notional volume or greater on Kwenta, Polynomial, GMX, GNS, MUX, or Vertex prior to May 9th, 2024 will be eligible for participation. This cohort spans about 13,000 addresses. Each address will be able to purchase up to $5000 USDC worth of tokens with only the available amount for purchase meaning there will be more addresses eligible than KSX available for purchase, only those that act quickly will be able to buy the tokens.

Copyright

Copyright and related rights waived via CC0.