Strategies to maximize earnings

The Kopi Protocol encompasses a suite of features, presenting several avenues through which users can leverage their funds for financial gains. This guide outlines the various strategies available to users for earning income within the Kopi ecosystem.

Providing DEX Liquidity

One primary method to generate revenue is by providing liquidity to the DEX. By contributing funds to the liquidity pool, users enable these funds to be accessed by traders; in return, liquidity providers are compensated with the traded funds plus an additional transaction fee. For instance, consider a user who contributes 100 kUSD to the liquidity pool. When another user exchanges 100 USDC for 100 kUSD, the transaction is processed through XKP as an intermediary step, resulting in the liquidity provider receiving XKP. This XKP, now part of the liquidity pool, is ready for use in future transactions involving XKP, facilitating a continuous cycle of trading and liquidity provision.

Depositing into the Money Market

Another lucrative option is to participate in the money market by depositing funds, which other users can borrow against loans. In exchange for their deposit, users are awarded cAsset tokens, which signify ownership over the assets and loans within the protocol’s vault for that specific currency. The value of cAsset tokens appreciates with interest generated from loans, directly correlating the profit potential to the volume of loans issued.

Staking

The conventional route to maximising yield through Kopi involves staking coins. Staking, a feature intrinsic to proof-of-stake networks, involves locking tokens in return for rewards such as staking income, transaction fee dividends, and governance voting rights. Kopi enhances the staking proposition by allocating a portion of the XKP purchased for burning to stakers rather than burning it entirely. This strategy rewards stakers and benefits the network by reducing the circulating supply, thus stabilising the coin's price and securing the network.

Conclusion

The Kopi Protocol offers diverse mechanisms for users to use their excess capital productively. Whether through liquidity provision, participation in the money market, or staking, users have ample opportunities to engage with the ecosystem and reap financial rewards, contributing to their prosperity and the overall stability and security of the Kopi network.