[KGP-27] KCF payment proposal (Feb 2024)

1. Summary

We are seeking the Governance Council’s approval to utilize funds from the KCF budgets, previously approved under KGP-12, KGP-16, and KGP-24, for making payments in the short term using KLAY. These payments aim to support service development, enhance infrastructure and attract developers in line with the Klaytn Community Fund’s objectives.

Specifically, a total of nine projects are set to receive funding, with three projects receiving a fixed amount of KLAY and the remaining six projects receiving a variable amount of KLAY. The precise expenditure of KLAY will be transparently disclosed via Klaytn Square.

The Klaytn Foundation will facilitate voting on each of the ten agenda items, enabling the Governance Council to express opinions and preferences on each specific matter.

2. KCF payment details

3. Voting Process
After governance proposal forum posting, each agenda items on this proposal will be moved to Klaytn Square for on-chain voting.

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Klaytn Foundation would like to notify you about a minor modification in the designated budget usage and seeks your understanding. In our earlier request for approval of the fourth-quarter budget(KGP-16), we specified that 3 million KLAY would be allocated for creating a liquidity pool, and would not have a market impact.

However, in this proposal outlining the specific usage, we would like to disclose that, alongside enhancing the existing liquidity pool, we also intend to utilize a portion as an incentive for the liquidity pool for a duration of three months, which might have a certain impact on the market.

Nevertheless, aligning with our prior explanation of D2I, we firmly believe that employing incentives within carefully calculated limits will contribute to invigorating the overall market and attracting liquidity to the Klaytn Network, ultimately benefiting the entire chain.

Throughout the duration of three months, the distribution of KLAY to a qualifying DEX will be dynamic, adjusted monthly based on liquidity conditions, allowing for flexibility in the incentive amounts. This initiative aims to enhance on-chain transaction volume and stimulate growth in TVL and trading volume.

To be eligible for the liquidity incentive, a DEX must incorporate KLAY Burn Mechanisms into its core operations, pledging to burn a portion of its net profits in KLAY.
The projects interested in applying can do so through comments on a forthcoming governance forum post dedicated to this purpose.