Read more: https://medium.com/@klexfinance/klex-mainnet-launch-1f53db7155ce
The KLEX token has multiple utilities.
- 1.Ve KLEX holders, vesters, and KLEX-KLAY LPs can lock their tokens in order to receive veNFTs. Ve NFTs give you the following: - Voting rights to determine KLEX emissions for liquidity pools on KLEX - Yield Boosters on liquidity mining rewards for supplying liquidity as well as 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. - Other protocols can direct rewards to their liquidity pools by bribing veKLEX holders to vote KLEX emissions toward their pools
- 2.A growing treasury As a decentralized protocol, no one person has the power to shut KLEX down once it is launched. As long as there is a non-zero amount of assets lent/borrowed on KLEX, 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 KLEX holders to burn & redeem the treasury funds for their KLEX. For example, if someone holds 1% of the total supply of KLEX, they could burn all of their KLEX to redeem 1% of all treasury funds. This does a couple things: - "Unlocks" the treasury funds that have been accumulating fees in tokens listed on KLEX (likely BTC, ETH, USDT, USDC, DAI, etc) and makes it a liquidity backstop. - Sets an arbitrage-able "floor" for KLEX's FDV. If KLEX's FDV dips below the NAV of the underlying treasury funds, someone could buy KLEX until the FDV is equal to the treasury NAV. Then, they can burn and redeem their cut of the treasury to complete the arbitrage. - Unlike other protocols (especially Ohm forks) where treasury NAV can become meaningless when there is no way to redeem the tokens for the treasury funds and the treasury funds are backed by the protocol token itself, KLEX's treasury will be fully backed by majors and stablecoins. Therefore, the protocol continues to generate real value over time (no short-term ponzi) and this value can go directly to the token holders. - KLEX becomes deflationary. Those that burn no longer have a claim to the future revenue and value generated by the protocol. Therefore, the "pie" for other KLEX holders increase, making the remaining KLEX more valuable.