Backed by Synthetix, Kwenta is a decentralized trading platform enabling anyone to long or short popular assets with leverage. Kwenta is built on both Ethereum mainnet and Optimism layer2.
Things you can do on Kwenta: Buy or sell a growing number of synthetic assets (Synths) Trade with up to 25x leverage. An additional shorting mechanism that lets traders take advantage of downward price action without the use of Futures via a borrowing and lending mechanism Stake KWENTA to receive inflationary rewards.
A synthetic asset is a tokenized derivative that mimics the value of another asset. Using a synthetic, you can trade $sXAG (Synthetic Gold) instead, which behaves like the underlying asset by tracking its price using data oracles such as Chainlink. Kwenta utilizes the decentralized Chainlink oracle network which provides up-to-date token prices data to smart contracts on Ethereum.
It is usually launched by DeFi protocols and in form of standard crypto tokens. Theoretically, any asset whose price can be fed by oracle could be synthesize into a synthetic tokenized asset.
Kwenta is built on the Synthetix protocol, so the liquidity traders can access on Kwenta is entirely created by SNX stakers on Synthetix.
Synthetix supported assets: sUSD, sBTC, sETH, sBNB, iBTC (short on BTC), iETH, sXAU (Gold price pegged), etc.
There are no direct counterparties for each trade in the Synthetix protocol, but it does use a counterparty-like model in which SNX stakers assume a proportion of the Synthetix debt pool when they mint sUSD. For more details, see the Synthetix litepaper.
Kwenta currently has three main features:
Swap functions on Kwenta spot exchange.
Users can take care of all their token swaps directly on Kwenta with 1inch integration. Users remain in full control of their assets when completing swaps on Kwenta, unlike centralized exchanges.
Decentralized Perpetual Future on Optimism:
- Leverage: Trade assets with up to 25x leverage.
- Near Instant Transactions: Having deployed Futures on Optimism, traders on Kwenta enjoy fast transactions and significantly reduced network gas fees.
- Liquidity: Achieving the same level of deep liquidity as centralized exchanges by using pooled liquidity made available by Synthetix.
- Assets: Starting with crypto and expanding to real-world assets.
- Advanced Orders: Get access to limit and stop market orders.
Stake your Kwenta token to earn staking rewards and voting power
The Kwenta staking contract allows users to lock Kwenta tokens in exchange for various benefits.
- Staked KWENTA will gain voting power within the system enabling stakers to vote in Elite Council elections and CKIPs offering the protocol a decentralized decision-making mechanism.
- Staked KWENTA will earn inflationary rewards. Additionally, staked wallets that have trading activity will earn additional rewards in an effort to place active Kwenta users at the center of decision-making. Staking is only available on the Optimism L2 Network.
In order to enable the exchange of synthetic assets, an exchange fee is charged by Synthetix whose fees are sent to the fee pool for Synthetix (SNX) stakers to claim. In addition to the exchange fee, a dynamic fee is in place which kicks in during times of high market volatility in order to neutralize front-running opportunities and protect stakers.
More detailed fee structure explained, please visit here.
Kwenta is founded by Synthetix protocol. It does not disclose its contributor information. Synthetix protocol is founded by Kain Warwick.
The Kwenta token (KWENTA) will be used to incentivize coordination and growth within the Kwenta DAO. It will have two primary functions: (a) Staking and (b) Governance. Detailed DAO proposal is here: KIP-4: Kwenta tokenomics
KWENTA will have an initial supply of 313,373. Weekly emissions will start at 14,463.37 $KWENTA the first week and drop to around 200 $KWENTA (1% APY) at the end of four years. Resulting in a total supply at the end of four years of 1,009,409.43.
20% of inflation will be routed to the treasury. 60% of inflation will be routed to stakers and 20% to trading rewards. These percentages can be adjusted at the Elite Council's discretion via a KIP. This will enable Kwenta to sustainably fund DAO roles while enabling the community to use the entire token supply as needed.
KWENTA printed via inflation will undergo a 1-year lock-up period. The lock-up mechanism will begin with an 90% fee for vesting KWENTA early which will decay linearly. If tokens are vested early, the percentage of tokens that are still applicable to the fee will be sent back to the treasury. After one year, the fee would reach 0% and no tokens would be burned when vesting KWENTA.
Ex. If you have 1 $KWENTA, and its vesting, and you vest immediately, you’ll be left with 0.1 $KWENTA, if you wait a year and you vest, you get 1 $KWENTA
veKWENTA and vKWENTA are receipt tokens of KWENTA for Aelin Pool participators in early 2022.
veKWENTA was created and issued on Ethereum layer 1. vKWENTA is the equivalent of veKWENTA on Optimism layer 2.
Users now can redeem or stake veKWENTA & vKWENTA following the official tutorial here to participate the governance of Kwenta.
