Kyber Network has announced a new partnership with ParaFi Capital to accelerate liquidity growth in decentralized finance.
ParaFi Capital is a cryptocurrency investment firm with a multidisciplinary approach to investments in the blockchain industry and the decentralized financial ecosystem. Its team comes from experience in large asset management companies, such as KKR, TPG and JPMorgan, and is supported by institutional investors, family offices, HNWIs and venture capital firms, including Bain Capital Ventures and Dragonfly Capital Partners.
Their approach focuses on digital assets related to tangible use cases, selecting investments based on fundamental analysis, examining token valuation, technical protocol development, on-chain data analysis and active engagement with management and development teams.
This partnership will help build the liquidity infrastructure required by DeFi, and establish a solid foundation for the future of decentralized financial liquidity.
Kyber will use the expertise of ParaFi Capital in DeFi, and their contacts with investors and the market, to grow its ecosystem of takers and makers, as well as its dApps.
In particular, to bridge the gap between professional market makers and on-chain market-making, ParaFi will connect professional market makers to DeFi through Kyber’s Fed Price Reserve (FPR) system.
More specifically, the partnership consists of a direct investment by ParaFi Capital in Kyber Network Crystal (KNC), with the aim of launching KyberDAO and accelerating the adoption of Kyber’s on-chain liquidity protocol.
The company is not new to this type of investment, as in the past it has also invested in MakerDAO and Compound in their early stages.
The partnership also complements the Katalyst update of Kyber which is expected to be released at the end of the second quarter of 2020, and which will launch KyberDAO, a decentralized platform that will allow KNC token owners to participate in the governance protocol.
One of the peculiarities of KyberDAO is that KNC owners who will stake their tokens, and use them to vote on the governance platform, will receive ETH rewards collected by the network fees.
Furthermore, the update will formalize KNC as the first deflationary staking token in which token burns and rewards are determined by actual network usage and the growth of DeFi.
ParaFi itself will participate in the governance by staking KNC, and voting in KyberDAO.
Kyber’s CEO, Loi Luu, said:
“ParaFi Capital has been a driving force in the governance and growth of DeFi. With their support and active participation in the KyberDAO, we are confident that we can bring Kyber’s role as the liquidity layer for DeFi to the next level”.
ParaFi Capital’s partner, Santiago Roel Santos, added:
“We have been working closely with the Kyber team on their crypto-economic re-design and transition to a DAO with Katalyst. Kyber’s growth trajectory and breadth of integrations across the DeFi stack are impressive, as it evolves to become a liquidity protocol for the ecosystem”.