Who Is Kyoko?
As the GameFi and broader Web3 industries attract new adopters, so too has the need for credit and flexibility grown. Poignantly, the rising cost of entry into GameFi and the challenge of gaming blockchain interoperability have limited the development of the GameFi industry and its gamers. Though, they have also presented key opportunities for projects willing to address these issues.
Kyoko, a web3 industry financing and GameFi infrastructure solution, is at the forefront of the crypto industry’s challenges and opportunities. Kyoko’s core solutions lower the cost of entry through digital asset lending while also combating blockchain interoperability through cross-chain lending functionality. While Kyoko adapts its products to the latest industry demands, its core features remain, through which Kyoko is keeping play-to-earn (P2E) accessible and profitable to all.
Kyoko: A Product for an Industry Problem
Peer-to-pool (P2P) NFT Lending
Originally launched as peer-to-peer NFT lending, Kyoko’s peer-to-pool lending platform brings liquidity to traditionally illiquid NFT markets. The P2P lending platform is a one-stop marketplace for gamers, Guilds, and investors to lend NFTs in exchange for liquidity.
Peer-to-peer NFT lending is not new. Peer-to-peer NFT lending is the practice in which gamers can access liquid loans by collateralizing their valuable NFT assets such as those from blue-chip, emerging, and early-stage collections. Kyoko, using technology supplied by Hasai, has disrupted this market by launching its decentralized fixed rate NFT peer-to-pool lending protocol in June 2022.
While peer-to-peer lending operations require a direct agreement between a lender and a borrower regarding terms like valuation and interest, peer-to-pool lending operations allow NFT lenders to access instant liquidity. One-to-one, customized deal pairing created friction, as there are time and resource costs associated with finding independent users that could come to an agreement on equal terms. Instead, Kyoko’s pool, supported by a large network of depositors who support the pool via staking tokens, allows users to collateralize NFTs and receive auto-generated terms. The system will, based on current market valuations, offer NFT depositors a loan amount, period, and fixed interest rate.
Since partnering with Hasai to launch its peer-to-pool functionality, Kyoko has also made other key changes. Prior, with peer-to-peer NFT lending, NFT liquidation processes would also be directly handled between lender and borrower. If a borrower were to fail to pay their loan, the collateralized or borrowed NFT would be directly transferred to the lender. Now, with Kyoko’s peer-to-pool platform, liquidations during the lending period have been swapped out for auctions, creating equal opportunity for pool participants to claim forfeited assets and repay the principal owed by the defaulting party.
Kyoko’s P2P NFT lending protocol, beyond changing its title, has undergone dramatic changes to keep up with industry dynamics. While each solution works to provide liquidity to illiquid markets and create value from unused gaming assets, the improved peer-to-pool lending protocol is disrupting the NFT lending space by removing the need for transactional counterparties. Kyoko’s P2P operations foster a seamless cooperation between pool participants, who benefit from staking rewards, and NFT lenders, who benefit from instant liquidity for unused NFT assets. These products will be launched within the first half of 2023.
Cross-Chain Asset Lending Platform
Kyoko’s cross-chain asset lending platform, commonly referred to as “CCAL,” not only allows players to monetize idle assets, but also allows gamers to borrow new NFT assets to earn income — all at a lower cost. Lastly, CCAL unlocks interoperability between blockchains by allowing gamers to list game assets across different blockchains on a single marketplace.
Working to solve both the high cost of entry in GameFi and poor blockchain operability, CCAL is a powerful tool. Similar to Kyoko’s P2P lending platform, gamers with idle NFT assets can lend them out via the CCAL platform. Borrowers, who may be looking to find NFT assets on a new blockchain to play new games or who may be looking to access required gaming assets for rent cost (as opposed to buying outright), will come to the CCAL platform to borrow NFTs. The Kyoko platform creates an open marketplace for borrowers and lenders to strike a customized agreement, including cash deposit, loan duration, and interest terms.
Once the term expires, the NFT borrower will repay the NFT asset back to the system. The lender then can reclaim their digital asset as well as claim interest that the borrower has paid on a predetermined fixed rate. In the case that an NFT borrower does not return the borrowed asset, the initial cash deposit — which was initially set by the lender — will be liquidated and sent to the lender.
Kyoko’s CCAL solution is a multi-use tool. Simultaneously, borrowers can access liquidity for unused assets, lenders can access new games at lower costs, and both can bypass blockchain interoperability through Kyoko’s cross-chain functionality.
High cost of entry and siloed in-game assets have become commonplace challenges for GameFi gamers. Beyond seeking out solutions like that of Kyoko’s, many have also turned to the power of Guilds. GameFi Guilds, most often organized into a DAO, are an organized group of gamers that often work together in-game to complete missions. Though, whereas traditional Guilds solely served as a community, GameFi Guilds add monetary value to a player’s gaming experience.
Guilds typically own a large collection of in-game assets that can be lent to players in exchange for a portion of their earnings, also known as the rent-to-earn “scholarship” model. This allows players, or “scholars,” to gain access to expensive NFTs that are required to play a game — and might otherwise take a considerable amount of time to collect on their own or form an expensive barrier to entry for certain games. These players can then play the game with the new NFTs in exchange for a percentage of what they earn in-game. Generally, it is a 70/20/10 split: 10% is paid to the Guild as “rent,” 20% to the community managers, and 70% to the individual scholars.
Though, these organizations do not have unlimited resources. Guilds require a substantial amount of cash to maintain operations and grow their capabilities. They may not have the necessary liquid resources; or, they may have their assets locked in a DAO treasury that requires long-winded votes and processes to tap into. So, Kyoko launched its DAO-to-DAO loan solution, which would target the liquidity demand of the organizations governing Guilds.
Through Kyoko’s D2D lending platform, DAOs could access both credit loans and collateralized loans. Both DAOs and Guilds can use the credit loan facility to access liquidity. Though, those that lock in, or collateralize, ERC-20 tokens, $KYOKO, or NFTs into the vault, could unlock higher cash amounts through collateralized loans.
Due to market turbulence over the last year, Kyoko has officially delisted its DAO-to-DAO lending service as of January 10, 2023. This was done for two reasons. First, projects that were well prepared to endure the bear market typically were well supplied and thus did not seek credit. Second, amidst the fallout of FTX and other substantial organizations, a valuation contagion was created that impacted the creditworthiness of many across the industry. In the wake of those events, Kyoko saw increased levels of systemic risk across the market and, unfortunately, also among its credit applicants. With trustworthy borrowers lacking demand for credit and untrustworthy borrowers not lacking, Kyoko decided to temporarily close its DAO lending service to protect its users, community, and partners.
$KYOKO: One Token to Rule Them All
Kyoko is committed to being a long-term project, which requires a sustainable, mutually beneficial tokenomics model. There are four main components of the tokenomics model: the $KYOKO token, the Token Staking Platform, the Kyoko Pawn Collection, and Kyoko’s NFT Staking Platform.
The $KYOKO Token
The $KYOKO token is the native cryptocurrency released by Kyoko. It is a governance token with a limited supply of one billion tokens, distributed across a variety of channels. In pre-sale, 210 million tokens were distributed to the project’s key investors, including Infinity Ventures Crypto, Animoca Brands, Morningstar, and YGG SEA, among others, as well as the project’s team and strategic advisors. To ensure long-term support for the project, pre-sale tokens stipulate multi-year vesting periods for strategic token holders.
The $KYOKO token first launched publicly on decentralized exchanges in April 2022 after a triple public sale event that included an IDO, IEO, and IVO. The remaining token supply will be distributed through long-term activities, including token staking and mining.
$KYOKO Token Staking
Offering more than just its ability to gain from the growth of the project and participate in its governance, Kyokoans can put their tokens to work through token staking. Specifically, token holders can lock their $KYOKO through Kyoko’s secure vault in the $KYOKO pool for liquidity mining or the $KYOKO:USDT LP that supports the project’s peer-to-pool liquidity operations. In return, staking participants will receive interest income paid out in $KYOKO. The longer participants stake their tokens, the more interest they will receive.
Kyoko Pawn Collection
Kyokoans have more options available to them to participate in the long-term growth of the project. Released in mid-2022, the Kyoko Pawn Collection is a unique collection of 1,000 NFTs available only to community participants. Differentiating our NFTs from the traditional risky, speculative collections that many have seen, our NFTs are released at a value of $20,000 USDT and trailblaze a new loan-to-earn model. A year after minting, holders can redeem Kyoko Pawns at a value of $20,000 USDT. Moreover, a pool of $KYOKO tokens will be split specifically among Pawn holders.
Of the 1,000 total Pawns in the collection, 633 Pawns are available for public sale. Overall, these Pawns were designed with long-term community members in mind: they guarantee the return of the initial purchase price while offering diverse opportunities for attractive gains both inside and out of the Kyoko ecosystem.
Kyoko Adapts to the Changing Landscape
Kyoko has launched solutions that suit the long-term development of the GameFi and broader Web3 industries. Though, as the past two years have shown, cryptocurrency is a volatile, tumultuous market. To secure its longevity, Kyoko is prepared to face and adapt to the quickly changing landscape.
Buidling in the Bear to Run with the Bulls
While the broader market has tanked and exposed numerous cracks in the system, Kyoko stands strong. The project will focus on continuous development, a community-centered governance model, and transparency to see it through the bear market.
As of February 2023, Kyoko’s finances remain in great shape. The project raised more than $6 million USDT across its seed, private, and strategic fundraising rounds. Kyoko invested roughly $3.6 million into technical development and long-term infrastructure costs to ensure sustainability and proper functionality. Still, approximately $2.4 million USDT remain in the cash coffers, offering protection against future headwinds. The project currently operates on $65,000 in monthly expenses, making $2.4 million USDT cash balance enough to sustain Kyoko’s operations for the next three years at minimum — even without any revenue.
Kyoko’s Future Plans
Kyoko will not rely on its coffers alone. Instead, the project has a long-term roadmap for future developments to support community and revenue growth.
In the short-term, Kyoko has phased out its DAO-to-DAO lending service. Kyoko was lucky to have avoided any operational or financial contagion from the LUNA, FTX, and other scandals that rocked the industry. Unfortunately, others weren’t. Though, as the credit worthiness of applicants declined, so too did the value of the service. This service may return if industry conditions and demand for DAO-to-DAO credit returns. Though, for the time being, these funds will be re-allocated to Kyoko’s cross-chain asset lending platform marketing budget, which will help attract new Kyokoans to the platform.
By the end of Q1 2023, Kyoko is focused on infrastructure development, public testing campaigns, and community growth. To start, Kyoko will refresh its tokenomics plan to ensure long-term project sustainability. Second, Kyoko will confirm and implement a plan to develop a 2.0 version of its P2P NFT lending platform, and later it will invite the community to begin testing. Meanwhile, Kyoko has plans to launch a community building event, as well as use funds reallocated from its former DAO-to-DAO lending services to begin promotional activities for CCAL.
In the period between the end of Q1 2023 and Q2 2023, Kyoko will focus on the developments needed to roll out its NFT lending platform 2.0. First, it will audit the platform’s smart contract, as well as optimize the smart contract according to audit results. From there, the team will begin developing an app prototype, which will be initially released to a limited number of users for beta testing. Finally, before the end of the second quarter 2023, the 2.0 version of Kyoko’s P2P NFT lending platform will be released.
Kyoko has further big plans for 2023. By Q3-end, Kyoko will seek listings for its token, $KYOKO, on centralized exchanges. Listing on a centralized exchange will help the project to grow its community and secure its reputation as a strong project with growth potential. This year, Kyoko will also expand its promotional activities for its CCAL and P2P NFT lending platforms through community events, as well as expand partnerships and collaborations with other NFT, GameFi, and Guild projects.
Kyoko Is Here to Stay
The team is committed to ensuring that Kyoko is not reliant upon market hype to support its growth. Instead, the project’s core goals focus on providing sustainable tokenomics and delivering solutions that offer real value to the GameFi community.
Kyoko has prepared its budget and tokenomics with long-term viability in mind. Supported by investors, the project has secured sufficient funds to operate well into the future — even before counting in revenue. Running on $65,000 per month, the team is committed to maintaining lean business operations. Moreover, Kyoko has established a sustainable tokenomics model that will encourage community participation. The project also devotes a large portion of the total token supply to the public through public sales, mining, token staking, and more. It has also extended further opportunities for participation in the project through Kyoko’s very own Pawn NFT collection.
Also, as has been shown throughout the year, Kyoko is prepared to change its business plan to support GameFi best. Though it was a difficult decision to close the DAO-to-DAO lending program, this move ultimately emphasizes Kyoko’s willingness to adapt to market conditions. Kyoko is consolidating behind its peer-to-pool lending and cross-chain NFT lending platforms, as GameFi players continue to prove the use case for these solutions.
And yet, the team will not stop there. With a well-defined roadmap for developing a 2.0 version of Kyoko’s NFT lending platform, supporting its release through audit and testing phases, as well as growing the community through marketing and promotional activities, we are optimistic for future growth.
Kyoko is here to stay. While the market around us crashes, Kyoko has built a sustainable project. Our mission, adaptability, and roadmap will support longevity, and we aim to provide complete transparency to our community throughout the process. Long story short: we look forward to growing alongside the GameFi community and our Kyokoans in the years ahead.
Kyoko addresses the most challenging issues in Web3. Kyoko’s cross-chain asset lending platform solves the persistent issues limiting the GameFi market, including the rising cost of entry and siloed in-game assets across different blockchains. Kyoko’s P2P NFT lending platform expands inclusivity and access to liquidity for NFT projects and holders through its decentralized fixed-rate NFT lending protocol. The $KYOKO token launched in April 2022.
Follow Kyoko at the links below to stay up to date on upcoming events, releases, and news: