Dynamic Collaboration Pool (DCP)
Last updated
Last updated
The Dynamic Collaboration Pool (DCP) is the core liquidity management system of the KLK Sync Protocol ecosystem. It aims to optimize capital allocation through decentralized mechanisms, reduce market volatility, and enhance returns for long-term stakers. DCP utilizes smart contracts to automatically adjust liquidity parameters and incorporates AI oracles to dynamically calculate reward distributions, ensuring efficient and stable operation even under uncertain market conditions.
DCP employs a non-linear reward calculation model, enabling long-term stakers to receive higher returns while reducing incentives for short-term arbitrage.
A collaboration coefficient is used to determine user reward weight:
Where:
Rewardᵢ is the daily reward for user i
BaseReward is the total daily reward distributed to the DCP pool
Stakeᵢ is the staked amount by user i
TotalStake is the total staked amount in the DCP pool
Cᵢ is the collaboration coefficient based on:
t: Staking duration (in days)
Lᵢ: Loyalty score, determined by duration without withdrawal
Gᵢ: Governance participation (voting frequency, proposal approval rate)
α, β, γ: System-adjustable weighting factors to maintain fairness
DCP adopts an AMM (Automated Market Maker) mechanism to ensure proper liquidity reallocation across market conditions.
Incorporates concentrated liquidity design from Uniswap V3, focusing funds within key price ranges.
AI oracles analyze market volatility to allocate additional reserves in high-volatility periods, mitigating liquidation risks.
30% of protocol fees and 50% of arbitrage penalties are injected into the DCP pool to enhance resistance to volatility.
Utilizes a Reserve Pool mechanism to inject capital into DCP during high volatility periods, stabilizing the system.
Liquidation penalty rate increases during extreme market conditions to discourage short-term arbitrage.
Holders of vcKSP governance tokens can vote on the allocation of 10% of DCP funds.
Funds can be used for ecosystem development, token buybacks, and burns to reinforce decentralization.
On-chain voting data is stored using Merkle Tree structures to ensure transparency.
Governance weight is optimized using Quadratic Voting, reducing whale dominance.
KLK Sync Protocol combines intelligent automation with decentralized governance to establish a robust, efficient, and sustainable DeFi infrastructure.
