One way to approach this is to start from scratch, and other blockchains have undertaken this route with varying degrees of success, but it can take longer and cost more. The other alternative is to use an established DeFi builder and fork a unique solution. This second route has been taken by EVM-based layer 1 blockchain Flare which has recently partnered with Rome Blockchain Labs to deliver Kinetic.
Kinetic will offer users a seamless platform for participating in DeFi complete with the potential to earn block rewards using their supplied digital assets. This collaboration will introduce lending and borrowing capabilities essential for deepening liquidity and fostering a robust DeFi ecosystem.
Rome Blockchain Labs (RBL) will facilitate the Kinetic launch and produce the technical infrastructure and design. RBL has experience in the creation and deployment of multiple custom financial markets on varying blockchain networks, including Benqi on Avalanche.
Jake Hunsbusher, one of the core team contributors at Kinetic, comes to Flare from the Hedera ecosystem. While there, he developed a personal fun NFT project, and afterwards developed a meme coin called Grelf on the side. Two years later, Grelf has grown into that ecosystem’s first major meme coin and boasts a $8.7million market cap.
His ability to manage a community with integrity was what attracted the RBL team to his CV. His day job was at Ledger Works where he was Head of Marketing, which also provided the team with confidence that he could handle the marketing – and listening to a community – for this project.
The RBL team met with Flare and both were of the same view – that people want to be connected seamlessly which is why RBL’s work on other chains was so important.
“The prior experience on other chains and money markets at RBL has made them stand out. It’s a policy of RBL to assemble team members that directly suit each project, meaning they can lean on internal experience which will fast track the overall development,” says Hunsbusher.
“Each ecosystem is different however, and the tokenomics for each project is also different as we will alter it to suit individual ecosystems and in this case, Flare.”
Bringing in expert partners will be key for Kinetic again using the principle of partnering with experts without having to reinvent the wheel. For example, they are working with a Quant Firm that is helping develop the tokenomics based on two tokens.
“This is important as we are operating a two token system – the Joule and the Kii – the former will be liquid and bought and sold, and the latter will be used for staking and thereby governance. Then depending on how much you stake, you will receive rebates.
“While it is possible to move from Joule to Kii at any time, the reverse will require a waiting time and you can reduce that wait by burning tokens, for example 35%, which further incentivizes people to hold the token longer.
“We have also discovered a way not to exclude US citizens, working with our legal team. This is exciting as we can offer our DeFi platform to everyone.”
Hunsbusher explains that one of the definitions of a security is the expectation of financial gains on the back of someone else’s work. However, if you work for gains yourself, then you have earned the financial reward.
“We will put our community to work via a voting mechanism where users are asked to vote in much the same way as a DAO works. If people answer a required number of questions in the right time frame, then they are entitled to the rewards. This really incentivizes people to hold the token, gives longevity to the token and encourages people to be active in the protocol.
“We are the first lending protocol to promote this structure but we are sure it will become commonplace over time when others follow suit.”
Hunsbusher expects this innovative tokenomics to both promote the long-term stability of the lending platform, and reduce volatility.
The partnership will see Kinetic benefiting from the decentralized asset prices provided by Flare’s native price oracle, the Flare Time Series Oracle. This integration will allow Kinetic to acquire off-chain time series data such as cryptocurrency prices without relying on a centralized entity. It will ensure highly accurate, decentralized, and frequently updated price feeds for lending and borrowing activities, underpinning a more secure and responsive DeFi experience on the Flare network.
Kinetic will also integrate FAssets, which are being developed by Flare Labs, Flare’s sister company, enabling traditionally non-smart contract tokens like BTC, XRP, and DOGE to engage in DeFi activities. Once these assets are converted into FAssets on Flare, Kinetic’s platform will allow them to be used for earning yield within DeFi. This integration enriches Kinetic’s lending and borrowing landscape, significantly increasing the variety and liquidity of assets available, and marks a notable step in bridging traditional cryptocurrencies with advanced DeFi functionalities.
Kinetic will initially launch on Coston2, Flare’s testnet, to enable a dynamic and interactive environment for users to engage, provide feedback, and gain valuable insights.
The roadmap for Kinetic is to be fully live during the early part of Q2, releasing its test net in the coming weeks. Shortly after that, it is hoped to launch a number of genesis pools to bootstrap some liquidity. In the mid to later half of Q2, it is hoped to launch the full protocol.
The genesis pools will operate as supply markets attracting early adopters with accelerated rewards.
“It will signal to the rest of the world that Kinetic is happening and allow us to explain our innovation. That’s why we named the protocol ‘Kinetic’ – it’s all about inspiring continuous energy through the Flare ecosystem.”
