Kriptoks

KLAP, or Klaytn Lending Application, is a non-custodial liquidity market protocol that offers users the ability to participate as either depositors or borrowers. Depositors can provide liquidity to the market to earn passive income, while borrowers can borrow in either an over-collateralized (perpetual) or under-collateralized (one-block liquidity) fashion.

KLAP is a lending and borrowing market built on one of the largest DeFi protocols, AAVE. As DeFi on Klaytn grows, the one-block flash loan feature will give rise to many MEV and arbitrage strategies, increasing the usage of the protocol.

But KLAP is not just another DeFi protocol on the Klaytn network. KLAP has several fundamental differences from AAVE and other DeFi protocols in the Klaytn ecosystem.

Firstly, KLAP was built by experienced DeFi/Web3 developers who want to build a bigger DeFi ecosystem on Klaytn. KLAP is fully open-source and has been designed with security in mind.

We also value developer UX, and we have built KLAP to be easier for other developers in the ecosystem to integrate with. We have a wide network across developers and projects, not only in Klaytn but also in other ecosystems. We plan to bring in more projects and liquidity, including bridges, DeFi users and funds, partnerships, etc. to boost the protocol.

Lastly, we have incorporated some of the most modern innovations in DeFi architecture and tokenomics design into KLAP. We have spent a lot of time researching the many iterations of token launches, Pool 2, emission rates, and simulated countless times to reach more optimal numbers. Users will be able to experience Solidly-style veNFTs, Platypus Finance-esque PvP yield boosters, decentralized governance via veNFT voting on emissions and important protocol-level decisions, Geist-like penalties for mercenary capital / farm & dumpers, significant rewards and yield boosts for long-term holders and liquidity lockers.

The KLAP token has multiple utilities:

VeNFTs KLAP holders, vesters, and KLAP-KLAY LPs can lock their tokens to receive veNFTs. VeNFTs give users the ability to vote on KLAP emissions for lend/borrow pools of each token on KLAP and yield boosters on liquidity mining rewards for both lending/borrowing and Pool 2. Ve holders can also vote on wider protocol-level decisions, such as the usage of Treasury funds, as well as adding additional utilities.

A Growing Treasury As a decentralized protocol, no one person has the power to shut KLAP down once it is launched. As long as there is a non-zero amount of assets lent/borrowed on KLAP, the treasury will continue to grow, as the protocol takes a small fee on the interest rates. The treasury receives 80% of all fees on the protocol.

At some point down the line, Ve holders can vote and decide to allow KLAP holders to burn & redeem the treasury funds for their KLAP. For example, if someone holds 1% of the total supply of KLAP, they could burn all of their KLAP to redeem 1% of all treasury funds.

This does a couple of things:

• "Unlocks" the treasury funds that have been accumulating fees in tokens listed on KLAP (likely BTC, ETH, USDT, USDC, DAI, etc) and makes it a liquidity backstop.
• Sets an arbitrage-able "floor" for KLAP's FDV. If KLAP's FDV dips below the NAV of the underlying

In addition to the utility of the KLAP token, the KLAP protocol also provides benefits to both depositors and borrowers.

Depositors can earn passive income by providing liquidity to the market. They can deposit their assets into the protocol and earn interest on them. The interest rates are determined by supply and demand, meaning that as more borrowers enter the market, the interest rates will increase, providing higher returns for depositors. Depositors also have the option to lock their tokens and receive veNFTs, which provide additional benefits such as voting rights and yield boosters on liquidity mining rewards.

Borrowers, on the other hand, can access liquidity in a decentralized and non-custodial manner. They can borrow assets by putting up collateral, either over-collateralized in a perpetual manner or under-collateralized in a one-block liquidity fashion. This provides borrowers with flexibility and choice, as they can choose the borrowing method that best suits their needs. Borrowers also benefit from the competitive interest rates offered by the protocol, as well as the security and transparency of a decentralized system.

Overall, the KLAP protocol aims to provide a secure, transparent, and efficient lending and borrowing market on Klaytn. By leveraging the expertise of experienced DeFi/Web3 developers and incorporating modern innovations in DeFi architecture and tokenomics designs, KLAP is positioned to become a leading player in the Klaytn ecosystem. With its focus on developer UX and interoperability, as well as its commitment to building a strong network of projects and liquidity, KLAP has the potential to drive growth and innovation in the DeFi space.