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A new DeFi application on the Klaytn blockchain has begun life with a bang, accumulating what is now the second-largest total value locked in its ecosystem just days after its launch.
Known as KLAP (Klaytn Lending Application), it has so far amassed an impressive $79.3 million in TVL since launching on June 21, putting it second only to KlaySwap, which has been around for more than three years already.
KLAP bills itself as a decentralized and non-custodial liquidity market protocol on the Klaytn blockchain that allows users to participate either as depositors or borrowers. Like many DeFi protocols, depositors gain greater utility from their idle token holding by earning a passive income. Meanwhile borrowers can seek both over- and under-collateralized loans.
In a blog post on Medium, KLAP explains that it’s trying to differentiate among DeFi protocols by leveraging the inherent advantages of the Klatyn blockchain, with a focus on metaverse adoption, protocol interactivity and the broader cohesion of all interactions on Klaytn. It also claims to benefit from a distinct first-mover advantage as the prime liquidity market protocol on Klaytn.
KLAP is very closely associated with the new Klatyn-based DeFi incubator Krew, which also launched this month armed with a $4 million fund to create, incubate and support emerging projects on the blockchain. Krew aims to support projects building on the Klaytn blockchain with access to funding, marketing assistance, advice on tokenomics and go-to-market strategy. The Klaytn blockchain is backed by South Korea’s Kakao Corp., creator of the KakaoTalk messenger app. One of Krew’s primary goals is to expand adoption of Klaytn beyond its stronghold in Asia.
The initial reaction to the community suggests that Krew has done a good job of that, with KLAP’s promise of $KLAP and $KLAY token rewards attracting plenty of interest from the DeFi crowd so far. In addition to the hefty TVL it has accumulated, KLAP boasts more than 30,000 followers across Discord and Twitter, and over 100,000 pre-registration entries.
The achievement is all the more impressive considering that many had assumed DeFi to be in a death spiral. Some of the crypto world’s most popular protocols and blockchains have leaked billions of dollars in TVL in recent months amid a much wider crash in the cryptocurrency ecosystem. The collapse of Terra’s Anchor protocol, which famously promised APY of 20% for all depositors, and the announcement by Celsius that its prohibiting withdrawals from users had badly damaged confidence in the wider DeFi ecosystem, causing many investors to escape to safer havens.
However, KLAP’s no nonsense-style discourse appears to have won plenty of skeptics over. In a blog post on Medium it freely admits that capital on Klaytn is “not maximally efficient” due to its lack of essential primitives. KLAP says it’s goal is to provide those primitives one product at a time, pointing out that by unlocking the capital capability of billions of dollars worth of tokens will simultaneously unlock “vast amounts” of rewards for market participants.
Equally important is the effort that’s gone into designing KLAP, which has focused on incorporating modern innovations in DeFi architecture and tokenomics.
“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,” KLAP says. “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.
Add to that KLAP’s solid team of experienced builders and researchers and its tight integration with Klaytn, and it’s easy to see why a DeFi crowd that’s crying out for relief has embraced its cause.
“We see KLAP in a great spot to leverage Klaytn’s technical architecture enabling high TPS, fast finality, and cheap transactions,” said Quantstamp CEO Richard Ma, an investor in KLAP. “We are confident in Klap’s compelling protocol design features and veteran builders to serve the nascent Klaytn DeFi ecosystem and scale it for retail adoption.”
Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice
