September 16, 2020 | AtoZ Markets – Combining unique aspects into a new type of offering will always trigger excitement. Yield farming program “Volcano” utilizes a Dutch auction to generate buzz for the CryptoKtities NFT MMO KittieFIGHT Game. An interesting approach that has not been attempted before.
What is a Dutch Auction Again?
For those unfamiliar with the concept, a Dutch auction may seem rather odd. Compared to regular auction methods, it uses the exact opposite approach. Instead of bidding up to a certain price, the item for sale is offered at a high asking price. Over time, the auctioneer lowers the price until participants accept the current value. This concept is also known as a clock auction or open-outcry descending-price auction.
The main advantage of using this approach is the speed at which a sale can be concluded. More specifically, there is only bid necessary per item up for sale. Using this concept in conjunction with yield farming makes Volcano a very unique creature altogether.
A Dutch Auction and Yield Farming
Using a limited-time Dutch auction to bring attention to a lucrative yield farming program is a unique approach. Via yield farming, the KTY token liquidity serves as an incentive program for KittieFIGHT, a Cryptokitties NFT MMO game. By incentivizing on-chain liquidity, there will be immense interest in this new offering. It is expected that Volcano will offer between 500% and 6,000% token earnings compared to traditional yield farming options.
The initial distribution of KTY – through the Dutch auction – is also the initial distribution of this new token. Participants will be able to democratically set the token price by sending Ether-denominated bids to the Dutch auction. This process will run for a total of two weeks. Supported assets include WETH, ANT, yYFI, yyCRV, yaLINK, aSNX, aLend, and so forth. Providing liquidity on Uniswap will make users eligible for a higher token return.
Lucrative Returns are Possible
Through the KittieFIGHT Volcano, on-chain liquidity will become incentivized. Users providing token pair liquidity on Uniswap will earn more tokens on a continuous manner. Tokens to be earned include both KTY and SAO tokens.
Compared to “traditional” liquidity provisions on Uniswap, the ROI outlined by KittieFIGHT seems a lot more lucrative. Traditional options earn 1% ROI or much less. KittieFIGHT offers a much scarcer token that will have its liquid supply capped for the most part.
With the liquidity rewards running for 6 months, there are plenty of tokens to be earned. Earliest participants can earn 700,000 KTY tokens and 700,000 SDAO tokens more during the first 7 days. Unstaking collateral can be done at any time, but yields can only be withdrawn if their participation time exceeds at least 1 month.
KTY and KittieFIGHT Explained
KTY is the native KittieFIGHT token that serves as a utility fee payment solution. KittieFIGHT is similar to a high yield casino or lotto game, as all lending on the platform is backed by combat in the CryptoKitties MMO game. Players are not required to obtain KTY directly in the game. All of the liquidity is funded by lenders partaking in this new DeFi offering.
Every week, the KittieFIGHT game will return a yield to the in-game bank, allowing lenders to withdraw proportionally-based sums based on their initial capital commitment. Committing more funds from day one will allow lenders to withdraw a bigger overall stake of the weekly yield.
Under the hood, KittieFIGHT has a game mechanic similar to fan engagement during real sports. Players in opposing groups bet Ether on opposing Cryptokitties NFTs, These NFTs are set to “fight” one another in a style akin to Mortal Kombat. Depending on the frequency and style of Ether bets, the actual combat will begin to unfold.
Incentivizing both camps to battle with Ether is an intriguing approach. There is an initial jackpot incentive that can swell to at least 10x its initial size. Raising the stakes, but also the rewards, will generate more interest in these fights among both players and lenders supporting the KittieFIGHT platform. Games are set up to return at least 10x its initial value before they can end.
KTY Tokens are designed to be a scarce and fix-supply resource to be used within the gamified token ecosystem. A maximum of 3.75 million tokens are created for yield farmers. In-game winners will be able to earn KTY tokens as they progress through the game.
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