D2I Plan: Revitalize the Kaia Ecosystem and Build a New Financial Infrastructure for DeFi
The D2I plan aims to rebuild the Kaia DeFi ecosystem and promote the development of financial infrastructure after the chain merger.D2I plan is a tailored incentive program specifically designed for Kaia (formerly Klaytn), aimed at rapidly rebuilding Kaia's DeFi ecosystem before the chain merge and establishing financial infrastructure for the integration of new DApps.
Looking back at the DeFi boom in 2021, Klaytn welcomed a large influx of liquidity through its mining mechanism. However, the on-chain bubble burst in 2022 led to a significant contraction of the on-chain economy, causing Klaytn's competitiveness to decline. The projects/DApps within the Klaytn ecosystem lacked interconnectivity with other services, which hindered their development.
Initially, the Kaia ecosystem revolved around Kaia and KCT (Kaia Compatible Tokens). However, the decoupling of bridged assets at the beginning of this year distorted the on-chain value of KCT. This led to bad debt issues for several DApps providing liquidity lending services (such as lending, CDP, and leveraged liquidity mining), and general DApps also faced challenges in accurate asset pricing. This made DeFi applications on Kaia more difficult for user experience.
The direct goal of the D2I plan is to restore this underutilized ecosystem and establish financial infrastructure for new DApps after the chain merge. The long-term objective of this plan is to revitalize Kaia's DeFi ecosystem.
In the first half of 2024, three DEXs were selected as D2I partners: two v3 AMM (spot) DEXs—Dragonswap and Kaiaswap, and one coverage AMM (spot) DEX—CapyBara. Although Kaiaswap recently exited the ecosystem, the remaining two teams continue to build.
Since their launch in the Kaia ecosystem, these teams have achieved remarkable results: over $710 million in trading volume, over $39 million in TVL, more than 3.1 million transactions, over 260,000 cumulative users, and over 245,000 KAIA tokens burned. Notably, the trading volume generated by the on-chain DEX for $KAIA is now comparable to Binance.
Detailed data from each team can be viewed through their analysis pages and various on-chain data providers:
Analysis Pages
On-chain Data Providers
- Dragonswap on Dune
- Kaia D2I Dashboard
- CapyBara DEX Overview
- Kaia Overview Dashboard
- Dragonswap on Defillama
- CapyBara Exchange on Defillama
- SwapScanner Dashboard
In the future, the builders of D2I will evolve from simple DEX platforms to comprehensive platforms. They are also continuously adding new features, such as Launchpads, Meme platforms, liquidity management providers, raffles, and perpetual futures.
These robust infrastructures now allow all DApps in the Kaia ecosystem—including the upcoming Mini Dapp on Line—to easily establish an on-chain ecosystem through these features.
- Launchpad: Capy IDO, KnightFury
- Liquidity Management Provider: KibbleFarm
- Raffle: Capy Raffle
- Perpetual Futures: Capy Perp
Additionally, the two teams are actively collaborating with ecosystem partners to enhance the overall synergy of the ecosystem. These partners include Lair Finance (LSD & LRT), Superwalk (M2E), KnightFury (Launchpad), Smart Layer (Token as Apps platform), Fusionist (Gaming), and Kaiafun (Memecoin platform). The integration of the Mini app ecosystem is also something to look forward to.
Future Direction of Kaia DeFi
With the two spot DEX teams selected through the D2I plan in the first half of 2024, Kaia plans to introduce Avalon Finance and, if necessary, bring in another DEX main team capable of handling institutional liquidity.
The DeFi ecosystem is continuously evolving. It is transitioning from complex "funding blocks" (such as yield aggregators and leveraged liquidity mining) to derivatives based on ecosystem native tokens and stablecoins. This transformation aligns with the growing institutional demand.
With the stabilization of core financial infrastructure (spot DEX and money markets), we will focus on creating derivatives based on ecosystem native tokens and stablecoins (e.g., LSDfi, LRTfi, yield-splitting derivatives). Our primary goal is to increase exposure to LSD and LRT, allowing Kaia's native token to play a positive role in the DeFi ecosystem.
What is Avalon?
Avalon Labs is a leading Bitcoin-centric lending ecosystem project that uniquely sits at the intersection of DeFi, CeDeFi, and RWA (real-world assets) lending. By connecting these three key areas, Avalon Labs has become a cornerstone of the rapid development of decentralized finance. Additionally, Avalon Finance has now been renamed Avalon Labs and has become the largest lending market focused on Bitcoin Layer 2 solutions and liquid staking derivatives (LSD).
Avalon Labs pioneered the integration of over-collateralized Bitcoin loans, providing seamless access to fiat liquidity backed by Bitcoin. Avalon Labs focuses on unlocking the full potential of Bitcoin, transforming the way digital assets are leveraged in DeFi, and advancing innovations in the CeDeFi space to meet institutional needs—particularly in fiat lending backed by Bitcoin. The diversity of the Avalon Labs platform is shaping the future of Bitcoin finance, where the fusion of decentralized and centralized models creates more efficient, scalable, and secure lending solutions.
Why Choose to Build on Kaia Chain?
Avalon Labs chose to build on the Kaia chain because Kaia focuses on community, sustainability, and simplicity—values that align closely with Avalon’s vision for decentralized finance. Kaia emphasizes accelerating the construction of a mass-market ecosystem and promoting the adoption of blockchain technology through user-friendly, open-source technology, making Kaia an ideal platform for Avalon to expand its CeDeFi and BTC LSDFi initiatives. By simplifying the blockchain experience for global users, Kaia provides Avalon Labs with a broad audience while building products on a foundation that prioritizes long-term impact and growth.
Kaia's collaborations and strategic partnerships with leading DeFi projects, including integrations with globally recognized DeFi protocols, provide strong ecosystem support for Avalon Labs to enhance the liquidity and security of its lending products. Kaia simplifies DeFi through its partnership with LINE NEXT, ensuring that Avalon Labs can deliver a seamless and easily accessible user experience—key to the widespread adoption of its innovative financial solutions. By building on Kaia, Avalon Labs can expand its influence in the rapidly evolving blockchain space by leveraging Kaia's robust technological infrastructure and forward-thinking approach.
What Achievements Has Avalon Made So Far?
Avalon Labs is a pioneering CeDeFi lending platform and the industry's first fiat lending platform backed by Bitcoin collateral at a fixed interest rate of 8%—one of the lowest borrowing rates in the industry. Since launching in February this year, we have achieved excellent product-market fit, with a market value exceeding $100 million and active loans exceeding $40 million. Our growth momentum is remarkable, with total locked value (TVL) surpassing $725 million, making us one of the fastest-growing lending platforms. Our team of 15 has unlocked significant value across multiple chains, solidifying our leadership position in Bitlayer BTC L2, Merlin, and other well-known platforms. We remain deeply focused on L1 native assets and actively collaborate with the BNB chain.
A key differentiator is our early adoption of FBTC as collateral, a cutting-edge asset class. Avalon Labs' close collaboration with Babylon validates our approach—we are one of the first lending protocols certified by Babylon and plan to launch over 8 types of LSDfi assets within this month. They are also developing our first collateralized debt position (CDP), which is being compared to DAI in stablecoin innovation. With over $725 million in TVL and $225 million in outstanding lending capacity across different chains, Avalon Labs ensures that every asset is utilized, maximizing asset efficiency and returns within the ecosystem.
What Value Will Avalon Bring to Kaia Chain?
Avalon Labs is committed to bringing its 80,000 to 90,000 active users and substantial total locked value (TVL) to the Kaia chain, expanding Kaia's reach in global markets beyond the Asia-Pacific region. By leveraging Kaia's seamless access to Web2, Avalon Labs will play a key role in helping Kaia attract millions of users, ensuring widespread adoption of Kaia. Avalon Labs will also actively engage with partners to promote the Kaia chain, introducing and integrating partners aligned with Kaia's vision. The collaboration between Avalon Labs and Kaia aims to help Kaia realize its maximum potential on the global stage.
