Litepaper
Knidos Litepaper
1. Executive Summary
Knidos is a protocol working to redefine true decentralization of Proof-of-Stake networks via its modular Decentralization Enhancement Layer.
2. Core Business
We focus on developing innovative solutions that promote blockchain decentralization. Our products and services aim to contribute to the decentralization of proof-of-stake blockchains via a trustless, network-agnostic orchestration layer.
Proof-of-stake networks achieve consensus via validator nodes, which require a high amount of starting capital as well as deep technical expertise. Knidos Labs' Decentralization Enhancement Layer addresses these limitations by modularizing the validator node, separating the funding and technical setup. This creates opportunities for liquidity providers lacking technical expertise, as well as for developers and operators without the necessary amount of liquid capital. Moreover, an integrated Node-Fi protocol activates dormant capital without sacrificing true custody or decentralization.
3. Knidos Decentralization Enhancement Layer
Knidos' Decentralization Enhancement Layer provides a trustless, network-agnostic orchestration environment to help decentralize proof-of-stake networks. We modularize the validator node, and activate dormant capital via our integrated Node-Fi mechanism. The tripartite protocol comprises the following sub-layers that work in tandem;
3.1. Funding Layer
The first sub-layer attracts capital by providing the highest APR short of setting up an individual validator node. Funding pools are permissionlessly initiated by users with validation configurations defined by the pool initiator. Investors have the flexibility to contribute any amount they choose to these pools, enabling them to invest in fractional nodes.
Fractional node ownership allows users to truly own a fraction of a blockchain node rather than delegating their coins, democratizing access to network consensus by making it more accessible and affordable. Each node fraction is represented by a non-fungible token held by the user . All fees generated and rewards earned by the node fraction are claimable by the owner of the non-fungible token.
All processes are conducted within a trustless framework, ensuring that the Knidos Protocol itself has no capacity to access the funds at any point.
3.2. Node Management Layer
The second sub-layer creates a DePIN market for Node Operators to monetize their hardware and technical capability without any need to commit liquid capital.
Operators are paired with capital from Funding Pools in a completely non-custodial structure to establish Proof-of-Stake validator nodes in any network. All processes are trustless, with node keys transferred to the Validation Engine via ZK-proofs on-chain.
The Validation Engine initiates the validation process, and nodes join the consensus. Operator Nodes will be verified by Knidos Protocol Nodes.
3.3. Node-Fi Layer
The third sub-layer activates dormant capital in the staking pools without rehypothecation, or sacrificing on true custody.
Liquidity providers can stake their NFTs (see 3.3. Funding Layer) and continue earning rewards for contributing to network consensus and security. They can also borrow capital directly from an integrated Node-Fi engine to use in the wider DeFi ecosystem, in a fully trustless structure. Lenders will provide capital to the contract, incentivized by interest paid by the node investors. This introduces a new level of financialization for dormant assets, boosting TVL and user activity for networks.
4. Revenue Model
The protocol generates revenue through fees applied to the staking rewards generated by the validator nodes and through its Node-Fi engine. Rates may be dynamically adjusted through governance to bootstrap liquidity and operators, drive activity and TVL, and foster decentralization.
Investor Reward Fees are deduced from investor stake rewards.
Operator Reward Fees are deduced from operator’s fees.
Node-Fi Lending and Borrowing Fees are added to the basis rates to further boost the treasury and ensure solvency.
5. $KNIDOS
Projected to launch in Q2 2025, $KNIDOS will act as the backbone of the entire protocol, providing access to utilities, governance, and protocol revenue;
Operator Registry: To register as a Node Operator in Knidos Protocol, users will have to lock $KNIDOS tokens as a security deposit.
Revenue Sharing: Stakers of $KNIDOS will be able to receive a portion of the revenue generated by the protocol following governance approval.
Governance: Stakers will participate in key decisions regarding the future of the platform, giving the community a voice in shaping the development and direction of Knidos Protocol, including fee switches and incentive mechanisms as well as deploying liquidity strategically to foster TVL growth and/or developer activity.
6. Team
Knidos Labs comprises a distributed team of 11 highly skilled professionals; including 4 Chief Executives with extensive backgrounds in blockchain startups and venture investments, 6 developers with proven track records in blockchain development, having been awarded numerous grants and participated in high-profile hackathons, and a Marketing Manager to drive market presence and user acquisition.
Arda Aşkın, CEO: Ex-Developer, Managing Director of Web3 Pre-Seed VC fund StartersHub Ventures
Ersoy Kiraz, CFO: Master’s in Finance, Managing Director of Web2 Pre-Seed VC fund StartersHub Ventures
Furkan Özalp, COO: First Web3 exit in Turkey, Managing Partner at Tixbase
Fatih Can Akay, CPO: Data Scientist, Head of Node Management
Mustafa Ahıskalı, Blockchain Lead: Ex-Bitexen
Ekim Cem Ülger, Tech Lead
Bertan Köfön, Blockchain Developer
Kadir Metehan Çalışkan, Blockchain Developer
Alp Kumbasar, Backend Developer
Ömer Başar Özgüven, Backend Developer
Berker Zor, Communications and Growth Lead
6.1. Grants and Hackathons
Knidos’ Developers have been awarded numerous grants and participated in high-profile hackathons, a sample of which can be seen below:
Grants
Hackathons
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