DAO to DAO Loans(D2D)
As play-to-earn gaming explodes in popularity, so too has the cost of entry. Prospective players now find themselves looking at $350+ price tags just to purchase a starter team in Axie Infinity. Legacy players that have amassed collections of strong in-game assets are frustrated by the inability to transfer this value across blockchains. Meanwhile, unused assets sit idly by without generating value. Guilds have been critical in addressing all of these challenges.
However, guilds require a substantial amount of cash to maintain operations and grow their capabilities. In our original vision, guilds that needed additional liquidity could come to Kyoko’s guild-to-guild lending platform and receive credit loans. These loans could be used to purchase ERC-20 tokens or GameFi assets across different blockchains, and larger more established guilds could lock tokens into the Kyoko Vault as collateral for higher credit lines. Emerging guilds could also come to Kyoko and apply for the financial and other incubatory resources they needed to take their game to the next level.
It then dawned on us: if guilds — who are typically governed by DAOs — need liquidity, wouldn’t other DAOs also have a use for credit? Why limit Kyoko’s lending services to DAOs within GameFi? After all, the world discovered the strong demand for DAO-to-DAO loans when C.R.E.A.M. Finance provided a $3.5 million collateralized credit line from the Iron Bank to PleasrDAO.
It was this realization that got us bouncing in our chairs. After all, in just the US alone, the corporate credit bond market was valued at approximately $8.5 trillion in the middle of 2021. Bringing this service into blockchain represents a huge market with robust demand and enormous opportunity. This was our new trillion-dollar idea.
Kyoko finances the future of Web3 development through its DAO-to-DAO loans.
Kyoko offers two types of DAO-to-DAO loans: credit loans and collateralized loans. DAOs and guilds will be eligible to apply for Kyoko’s credit whitelist to obtain liquidity. If they want a higher amount of money, whitelisted organizations can also lock ERC-20 tokens, $KYOKO tokens, or NFTs into the Kyoko Vault as collateral for higher credit lines.
Kyoko has intimate partnerships with top DAO/guild data aggregator platforms. This data informs Kyoko’s evaluation and risk models that assess the creditworthiness of the DAO/guilds applying for loans.
Credit loans will be drawn from a liquidity pool, and liquidity providers will earn interest income from borrowers’ interest payments, while also mining KYOKO tokens. Liquidity providers can obtain attractive interest rates via Kyoko’s DAO-to-DAO liquidity pool when they deposit USDT in return for interest income and $KYOKO tokens. Liquidity providers may also be eligible for early investment opportunities and airdrops from high-potential emerging guilds.