[Notice] Boosting Onchain Metrics Pre-D2I

Boosting Onchain Metrics
Before the commencement of the D2I Project, we have identified the verification of the estimation framework we made for (1) Liquidity Provision and (2) Liquidity Incentive disbursements, to be evaluated through an initial pre-test aimed at enhancing Onchain Metrics.

With the anticipated approval of KGP-27 by the GC, we are set to carry out preliminary assessments to test our theories, with the goal of reaching the set Trading Volume/TVL objectives for the D2I. It is important to note that the resources mentioned are currently undergoing the approval process through KGP-27, thus eliminating the need for further GC votes.

The Resources supporting the Pre-test

(1) Liquidity Provision

For the pre-test phase, we have allocated 2,000,000 KLAY for liquidity provision. This liquidity, owned and held by the foundation, will be provided on an interest-free basis and is specifically earmarked for pre-test activities. This will be returned back when the pre-test is done. We are aware that the amount of KLAY can vary based on the market situation.

(2) Liquidity Incentive

An allocation of 1,500,000 KLAY has been set aside for this incentive, which will be distributed over a three-month period with the flexibility to extend if required. Throughout this duration, 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.

Target Trading Volume/TVL

Based on the aforementioned resources, our targeted 30-day Trading volume/TVL is set at 20, with Liquidity Incentives having a 1.5 multiplier compared to swap fees. The specific stats are as below:

  • TVL Prediction: $1.5 million per Incentivized Pool
    • Approximately $800K in initial liquidity per Pool
      • The Foundation will contribute $400K in KLAY to initiate liquidity for KLAY-paired pools, while decentralized exchanges are required to match this with an additional $400K in bluechip assets(ETH, USDT, etc.), totaling $800K in initial liquidity.
    • $700K added by LPs due to the liquidity incentives
  • Swap Fees (Annualized): $180K
    • Trading Volume: $360M ($1.5M * 20 * 12)
      • Volume (30D)/TVL = 20
    • Swap Fee Rate = 0.05%
  • Liquidity Incentive (3 month): $67.5K
    • Swap Fee * 1.5 = 180*(3/12) * 1.5
      • Liquidity incentives can be scaled based on TVL and Trading Volume. As these metrics increase, additional incentives can be provided, up to a maximum cap to 1,500,000 KLAY.

The Status and Selection of Bridges on Klaytn Network

Among the bridges currently connected to Klaytn network, the available ones are (1) Wormhole and (2) Synapse. Although Celer(cBridge) is also connected, it is temporarily suspended due to network issues.

The most widely used bridge among these is the Wormhole bridge, known for its comparatively low fees. Additionally, there are various major L1s and L2s available for connection, including those in the EVM-compatible chains. Considering these advantages, the foundation encourages using Wormhole as the primary bridge, if bridging assets are needed. While we recommend certain bridges, we are open to alternatives provided they come with sound justification.

Expected Goals and Timeline

  • Liquidity provision
    • 2,000,000 KLAY will be provided within the end of February.
  • Liquidity incentive
    • 1,500,000 KLAY will be distributed from February until full disbursement.

Judging Criteria

  • The DEXes should be in operation before the end of February.
  • KLAY burn mechanism should be applied.
  • Liquidity incentives should be planned properly, including how to attract liquidity through the incentive.
  • The team should understand the vision of D2I and commit to contributing to D2I.

Participation Requirements for Builders

With the outlined resources, teams keen on joining are encouraged to respond to this post in the comment section. In your application, DEXs should ensure their comments include the following details:

  • Describe the specific areas where the Liquidity Provision will be allocated and what effect it has
  • Liquidity incentives should be planned properly, including how to attract liquidity through the incentive.
  • State how this liquidity will result in KLAY Value accrual. Refer to the D2I Proposal if you need guidelines.

DragonSwap is an open-source platform that welcomes all traders and liquidity providers. DragonSwap will soon launch on Klaytn. DragonSwap offers a range of services including token swapping, liquidity provisioning (LP), and farming. Users benefit from its rapid transaction speeds and low fees.

DragonSwap is immensely enthusiastic about the Klaytn D2I program, with the ambition to cultivate the premier DEX experience on the Klaytn blockchain. We believe that our platform will not only meet the high standards set by the program but also pioneer a new wave of decentralized trading with user-centric features and robust liquidity - the hallmark of an exceptional DEX.

Application Details

  1. Specific Areas for Liquidity Provision Allocation:
  • The initial challenge of bootstrapping an exchange lies in securing substantial liquidity. DragonSwap has successfully secured external liquidity in key assets like BTC, ETH, and USDT. This robust liquidity base is set to enhance market confidence and initiate a virtuous cycle: deep liquidity attracting more users, which in turn further deepens liquidity and improves user experience.
  • Specifically, we will commit $400k into KLAY/USDT liquidity pool secured from external affiliate resources.
  1. Liquidity Incentive Strategy:
  • Our liquidity incentive plan is crafted to offer a compelling value proposition to liquidity providers. By offering attractive yields, we intend to draw substantial liquidity into our pools, leading to increased trading activity.
  • We will strategically allocate this liquidity incentive to high-demand trading pairs such as KLAY/USDT, BTC/USDT, ETH/USDT, and ETH/BTC. By doing so, we aim to significantly boost the Total Value Locked (TVL) and elevate the DragonSwap user experience from inception. This targeted allocation is designed to enhance trading volume, stabilize pairs, minimize slippage, and attract permanent liquidity providers.
  • The incentive program is structured to be dynamic, adapting to market conditions to ensure ongoing attractiveness and liquidity retention. DragonSwap has secured over $4m in strategic liquidity which underscores our commitment to fostering long-term growth instead of temporary, incentive-driven liquidity.
  1. Liquidity Impact on KLAY Value Accrual:
  • DragonSwap’s success is intrinsically linked to the value accrual of KLAY. The ample initial liquidity will reduce spread and slippage, bolstering DragonSwap’s appeal as a trading and investment vehicle. Our KLAY burn mechanism, which commits to burning 30% of our protocol revenue, is in line with the D2I Proposal’s vision and will serve to directly link the success of the protocol to the value of KLAY.

Additional Commitments:

  • Pretest and Launch Readiness: DragonSwap is set to commence the initial testing product launch phase, ensuring a swift launch and liquidity boost to meet the foundation’s end-of-February deadline.
  • Unique Approach to Token Mechanics: Opting out of releasing a native governance token at launch, we avoid potential conflicts of interest and direct our full attention to enhancing the KLAY ecosystem.
  • Long-term Contribution to Klaytn: We acknowledge the foundation’s prudent approach and are poised to surpass the liquidity benchmarks it sets. Our active participation in the D2I program reaffirms our dedication to the sustained growth and vitality of the Klaytn network.

Bridge for Non-Native Assets:

  • Among the bridges currently connected to Klaytn network, DragonSwap plans to use Wormhole as the primary bridge, if bridging assets are needed.

Thanks for applying this, DragonSwap Team. Thanks to the team that the proposal is really aligned well with D2I.

I have some questions.

  1. Can you confirm when you can bring $4M assets onto your swap?

  2. Is it possible to provide specific numbers to each pool?

  3. Can you confirm the launch date of DragonSwap?

  4. Will you open the source code at the launch?

  5. We can provide the liquidity after the voting is finished, which is estimated at 9 PM on 15th. Would it be okay?

  6. Can you specify little bit more how your team will use the liquidity incentive? For example, I think DragonSwap will have four pools in the beginning. Will you provide liquidity incentive equally, or proportional trading volume or TVL? You can also use the liquidity incentive not only for the liquidity providers but also traders. Please provide more specific plans.

  7. DragonSwap will burn 30% of protocol revenue using KLAY. Can you provide the swap fee of the pools and ratio between LP reward and protocol revenue?

Thanks for the answers in advance.


Hello, Colin.
Thank you for the quality questions.

Please see our answers below:

1. Can you confirm when you can bring $4M assets onto your swap?

  • We expect the liquidity to be provided within February shortly after the launch.

2. Is it possible to provide specific numbers to each pool?

  • the planned pool liquidity will be as follows:
    => KLAY/USDT (around 800k)
    => BTC/USDT (around 800k)
    => ETH/USDT (around 800k)
    => ETH/BTC (around 1.2M)
    => USDC/USDT (around 400K)

3. Can you confirm the launch date of DragonSwap?

  • 14th February is the target launch date but it’s subject to change.

4. Will you open the source code at the launch?

  • The source code will be open to public through Github.

5. We can provide the liquidity after the voting is finished, which is estimated at 9 PM on 15th. Would it be okay?

  • No problem. KLAY/USDT pool could be open together with the other pools at launch and the foundation’s liquidity provision could be added later.

6. Can you specify little bit more how your team will use the liquidity incentive? For example, I think DragonSwap will have four pools in the beginning. Will you provide liquidity incentive equally, or proportional trading volume or TVL? You can also use the liquidity incentive not only for the liquidity providers but also traders. Please provide more specific plans.

  • TVL and transaction volume shall be part of the criteria. the liquidity incentive will be distributed to relevant LP pools weekly based on the criteria. There is no plan to distribute the LP incentive to traders yet but we can consider it.

7. DragonSwap will burn 30% of protocol revenue using KLAY. Can you provide the swap fee of the pools and ratio between LP reward and protocol revenue?

  • the default fee ratio between LP reward and protocol revenue will be 80 : 20.
    the swap fees for each pool are as follows:
    klay/usdt: 0.05%
    eth/usdt: 0.10%
    btc/usdt: 0.10%
    eth/btc: 0.10%
    usdc/usdt: 0.05%

We’re really excited to be contributing to the Klaytn ecosystem! We’re looking forward to our cooperations going forward.

Thank you.


Thanks for the comprehensive answers. It will be really helpful for the community to understand what DragonSwap will do better.

Here are some more comments:

  • Please also verify the contract code in KlaytnScope and KlaytnFinder.
  • Since it is very critical how to distribute the incentive, please provide more concrete plan.

Also, we are looking for other builders to participate this pre-test!

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Hello Colin,

Your engagement with our project is greatly appreciated, and we’re here to provide clarity on the points you’ve raised.

  1. Regarding your inquiry about the contract code verification, we fully understand the importance of transparency and trust in the DeFi space. We are committed to verifying the contract code on both KlaytnScope and KlaytnFinder.

  2. On the matter of distributing the liquidity incentive, our approach is designed to be dynamic, adapting to the evolving needs of the DragonSwap ecosystem and its participants. The foundation of our plan involves progressively distributing more KLAY to liquidity pools as the Total Value Locked (TVL) increases. However, we acknowledge that market conditions and transaction volumes are critical factors that may necessitate adjustments to our strategy. Rest assured, our commitment is to allocate 1.5 million KLAY in total to liquidity providers (LPs), adhering to a weekly review process that prioritizes protocol and network growth.

We intend to review the distribution of liquidity incentives on a weekly basis, prioritizing the growth of the protocol and network. The distribution plan will be made public weekly on our offical Medium website. This flexible approach allows us to respond effectively to changes in the ecosystem, ensuring that incentives are aligned with our goals of fostering a robust and vibrant DeFi platform.

Thank you once again for your engagement and support. We’re excited about the positive impact DragonSwap will have on the Klaytn ecosystem and look forward to our continued cooperation.

Best regards,

The DragonSwap Team


Thanks for the quick reply, DragonSwap Team.

I also understand that fixed plan cannot be easily made with this tight timeline. We are also trying to find better ways of providing incentive to the community. It would be really wonderful if you discuss together how to use the incentive as time goes by with Klaytn Foundation.

Also, please share the link to the Medium if you already made. We will look into that closely.

1 Like

Bluewhale Protocol has created a sustainable DeFi ecosystem within the Klaytn ecosystem and has grown steadily over the long term with investors, and Aqua Space, a V3 DEX, will soon be launched on the Klaytn chain.
Aqua Space can provide a variety of services such as token exchange, liquidity provision, farming, IDO, and NFT minting.
Bluewhale Protocol has been growing the liquidity of the Klaytn DeFi ecosystem and highly values ​​and participates in the Klaytn D2I program.

Liquidity Incentive Strategy

Bluewhale Protocol will sequentially inject the pre-funded $7 million into the liquidity pool. Additionally, we are preparing to provide liquidity to our partners.

We will strategically allocate these liquidity incentives to KLAY/highly traded token pools. We will continue to increase liquidity supply and trading volume by creating various pools connected to CEX.

KLAY / We believe that the liquidity incentive granted to token pools with high trading volume will lead to the inflow of external assets and the supply of liquidity to assets stored in wallets.

The default commission ratio between liquidity providers’ LP rewards and protocol profits is 90:10. Additionally, pools that distribute krill, a reward token, to LPs will receive a 100% of the rewards.

Liquidity Impact on KLAY Value Accrual

90% of the protocol profits are fully used for Krill buyback, 10% is used to create an insurance fund, and the insurance fund is managed stably, and 30% is used for KLAY burning every quarter.

Therefore, the team does not take any profits from Aqua Space, and it is a public DEX in which all profits go to the liquidity LP provider.

Through DEX, the team does not pursue profits, and the increased liquidity and trading volume that provides liquidity LP providers and investors with higher level investment opportunities will contribute greatly to increasing the value of KLAY.


Hi! Thanks for leaving a comment, Bluewhale team!

We need to know more detailed plans. Here are some questions.

  1. What kinds of assets does your team have? Your team already secured $7M assets. Please specify what kinds of assets. Also if you have committed assets from your partners, please specify the numbers together.

  2. Can I understand why you decided to distribute krill token to the liquidity providers instead of providing the exchanged tokens?

  3. It is unclear how much percentage will be used for KLAY burning. I understand that 90% of the protocol revenue will be used for Krill buyback. Then we have 10%. It will be used for insurance fund. It seems like 7% for insurance fund and 3% for KLAY burning. Is this right?

  4. Can you provide the distribution of Krill? Please specify what portion will be used for community airdrop, team, business purpose, etc.

  5. Is Krill already minted? If not, when will it be minted?

  6. Please also specify how the liquidity incentive will be used. Please take a look at the previous discussions with DragonSwap. You can understand what kinds of thing I want to clarify.

Again, thanks for applying pre-D2I program! Hope to see your wonderful answers! :slight_smile:

1 Like

Hello Colin,

  1. BTC ,ETH ,USDT, KLAY and BLUEWHALE ecosystem tokens (sBWPM, CLAM, PEARL, sADOL, Krill)
    Liquid assets provided by partners are not currently confirmed and require continuous coordination with partners.

  2. In a typical case, the default commission ratio between liquidity providers’ LP rewards and protocol profits is 90:10.
    In addition to the 90%, Krill, which is additionally received from some pools, is a reward token, with 30% of the total issued being distributed to Aquaspace DEX, and is also used as a reward in other Blue Whale ecosystems. Additionally, weighting is given to important major pools to increase the stability and profitability of the liquidity pool.

  3. There are no protocol profits taken by the team in Aquaspace, and all profits are distributed to liquidity providers and Krill buybacks. You are correct in understanding this. Although the burn rate of protocol profits may seem low, the amount of KLAY that is continuously burned is determined by the trading volume based on the abundant liquidity of the DEX. Aquaspace will greatly contribute to the increase and incineration of KLAY value based on its abundant liquidity and trading volume.

  4. Krill is already being issued and is one of the reward tokens used in various ways in the Blue Whale ecosystem. As Aquaspace grows, the value of KRILL increases. It will be very helpful to look at Blue Whale’s docs and take a look at the ecosystem that Blue Whale is creating.
    소개 - Bluewhale Docs

  5. Liquidity incentives will be strategically focused on pools that can generate high trading volume for Klay pairs. How liquidity incentives are used will be an important strategy for the Blue Whale team. For reference, so far, the Blue Whale team’s clam and pearl have always maintained stable prices and have maintained high transaction volumes across the entire Klaytn chain. Please refer to the Blue Whale team’s successful CONECTOME so far.

Clam applies low swap fees with major pools, and price stability is guaranteed by stable pairs and thick and concentrated liquidity.
If the swap standard is CLAM, it is safer with less slippage and price impact, and it is a structure that can minimize asset loss and maximize profits during swap. As a result, CLAM maintained the top 10 ranking in transaction volume on the Klaytn chain.
We will expand this success story to KLAY and make KLAY the standard for swap within DEX.

Blue Whale Protocol launched the Dex aggregator service in 2021 and has provided a variety of services to date, improving investors’ convenience and transparency of the blockchain. By growing many assets within the Klayton DeFi ecosystem and creating the Blue Whale ecosystem, high-level It led to meteoric growth and trading volume.
The DEX we are creating will lead to a continuous supply of liquidity for KLAY and major assets, and the tokens listed on CEX will increase trading volume by supplying liquidity to the defi ecosystem. It will be an important starting point for Klaytn Chain defi.
Additionally, the various tokens traded on Klaytn Chain defi should grow a lot and be listed on major CEXs, rather than being traded only in the defi ecosystem. I think we need to increase investors’ interest in the KLAY defi ecosystem and create an inflow of new capital.

1 Like

Hi, Bluewhale team. Thanks for the detailed answer!

Here are the following questions.

1.1. Is it possible to specify how much you can make each pools? We need to see the numbers like below:

=> KLAY/USDT (around 800k)
=> BTC/USDT (around 800k)
=> ETH/USDT (around 800k)
=> ETH/BTC (around 1.2M)
=> USDC/USDT (around 400K)

1.2. In addition, please specify what pool you will make with 2M KLAY.

1.3. Where does BTC,ETC,USDT tokens reside? in Klaytn or in other chain? If it is in Klaytn, please provide which bridge is used. If it is in other chain, please provide which bridge will you use to bring to Klaytn.

  1. The question I asked is why you decide to distribute Krill instead of the original pair tokens. For example, it is straightforward to provide KLAY or USDT to the liquidity providers of (KLAY,USDT) pool. It seems like Aquaspace DEX automatically swap KLAY/USDT to Krill and provide Krill to the liquidity providers. Is this right? Then, please justify why it is a better method.

Since it is very short-term strategic trial with pre-D2I, please provide more specific plans with the numbers.

Here are additional questions.

  1. When is the launching date of Aquaspace DEX? It is almost the end of Feb. It would be good to provide exact launching date. As you know, DragonSwap is already launched. If Aquaspace DEX was already launched as well, please provide the service link.

  2. How will the governance of the DEX work? How will the voting power be calculated? Seems like Krill is not for governance of the DEX.

  3. Due to the Orbit bridge hack, it is much important that how we can bring additional liquidity from other chains or how we can bring additional values to the Klaytn ecosystem. Do you have specific plan for that?

1 Like

Hello Colin, thank you for your friendly question.

=> BTC around 800k
=> ETH around 1.6m
=> USDT around 1m
=> CLAM around 1.2m
etc. will be provided as liquidity, and due to the characteristics of V3 and the fact that it is a volatile asset, the size of liquidity of each pool may vary depending on price changes at the relevant time.
The assets supplied will create pools in various pairs, so the size of the liquidity of a simple pool does not matter.

1.2 We plan to create KLAY/USDT, KLAY/BTC, KLAY/ETH, KLAY/CLAM, and KLAY/PEARL pools, and various additional pools may be created depending on changing market conditions and added assets.

1.3 BTC, ETC, and USDT tokens are assets supplied through Orbit Bridge and are on the Klaytn chain.
Trading of assets held by dapps that correspond to the D2I vision of creating an ecosystem centered on (B) and (C) must be continuously activated. Many of the dapps corresponding to (B) and (C), as well as Klaytn Chain DeFi investors, have created and developed an ecosystem based on assets supplied through Orbit Bridge. In addition, we would like to actively participate as OZYS’ plan to restore Orbit Bridge assets and normalize the ecosystem has been announced.
We confirmed that BTC, ETC, and USDT assets were supplied to DragonSwap through the wormhole bridge. With the goal of allowing various bridge assets to be freely traded on the Klaytn chain, we are checking various bridges available in addition to Wormhole Bridge.
As BlueWhale Protocol aims to advance into multi-chain, we want to secure the diversity and stability of available bridges.

2.For example, for the liquidity provider transaction fee, we provide 90% of the swap fee for KLAY and USDT to the liquidity provider of the (KLAY, USDT) pool. Additionally, you can receive Krill as a reward, and it does not only provide Krill instead of KLAY/USDT.
It is completely different from the way DEXs relied on Liquidity Mining before D2I was released.

The launch of Aquaspace DEX is targeted for February 27th.
The voting rights method is a method that existing DEXs rely on Liquidity Mining, and the fee distribution method is completely different.For pools using the V3 method, fees are distributed to liquidity LP providers who deposit in the range where transactions are concentrated among the total liquidity.
KRILL is a reward token whose value increases with DEX profits, but does not have the decision-making power of the DAO.
As previously answered, the BlueWhale team intends to actively participate in OZYS’ Orbit Bridge asset recovery plan and ecosystem normalization plan as announced.
Additionally, we aim to create a trading volume that exceeds CEX by providing sufficient liquidity for various tokens issued on the Klaytn Chain. We have seen for a long time that CEX trading volume can increase through growth and high trading volume on DEX.
Aquaspace DEX’s transaction support will provide growth opportunities for DAPP and contribute to increasing the value of many assets.
External asset supply is important, but as value grows in the DeFi ecosystem, we believe that creating CEX transaction support will contribute to further increase in value.

Thank you.
Be happy today too.


Thanks for the quick response, Bluewhale team.

  1. We will provide 2M KLAY for liquidity provision. Can you specify how this KLAY will be allocated to the different pools like KLAY/USDT, KLAY/BTC, KLAY/ETH, etc?
    For example, 1M KLAY will be assigned to KLAY/oUSDT, and 0.5M KLAY will be assigned to KLAY/BTC.

  2. Will the source code of the contract be opened?

  3. As far as I understand, the swap fee will be distributed like this. Is this right?
    90%: LP Reward
    9%: Krill buyback
    0.7%: insurance fund
    0.3%: KLAY burn

  4. Since the USDT, BTC, ETH are all Orbit assets, it would be some issue if we need to bring more oUSDT, oBTC, oETH. Because currently Orbit bridge is suspended. Is there any solution to this? It would be good to revitalize the current bridged assets on Klaytn, but it has also limits.

  5. Since Krill will be distributed to compensate the 10% of swap fee, but the buyback will be done only with 9% of the swap fee. Is there any mechanism to keep the price of Krill stable?

1 Like

Hello Colin,

KLAY-owBTC 0.25M
The pool that the BlueWhale team wishes to designate is as above. However, V3 pools require a lot of changes and excellent strategies according to changing market conditions and trading volume. The BlueWhale team has created high trading volume and stable, continuous value increases through various strategies over a long period of time.

  1. Aquaspace’s contract source code will be made public.

  2. You are correct in understanding the basic liquidity pool fees.

  3. oUSDT, oBTC, and oETH are already sufficiently secured. Various bridge assets and native assets will also be supplied sequentially.
    If RWA assets are stabilized, we will also actively secure them and provide liquidity.

  4. Krill, paid as an additional reward to liquidity LP providers, aims to go beyond maintaining stable prices. Blue Whale’s ecosystem is basically created with tokenomics based on a deflation model.
    The initial Krill price formation is determined by the ratio of the 9% of AQUA SPACE profits accumulated over a certain period of time after the issuance of KRILL and the number of KRILL issued during that period.
    CLAM and KRILL in an amount equivalent to the profits of AQUA SPACE will be generated as lp. After this, 9% of AQUA SPACE’s profits will be used for the buyback of KRILL.
    Additionally, AQUA SPACE is a DEX that continues to grow in size. Therefore, as time passes, there will be more KRILL buybacks. This is a method that has been used and verified by the Blue Whale team many times, and this method is possible when the team is not pursuing profit from Aquaspace.

BlueWhale Protocol is the first DEX aggregator of Klaytn DeFi and has continued to grow in value even during the DeFi Winter period. One of the most difficult aspects for new investors was understanding transactions, and we recently opened the SmartScope service to make it easier for anyone to understand various transactions and increase transaction convenience.

Thank you.
Be happy today too.


We extend our sincere thanks to DragonSwap and Aqua Space for their participation in Klaytn’s pre-D2I program. Your efforts have significantly contributed to the initiative’s success.

After careful consideration, we have chosen to proceed with DragonSwap for the pretest phase due to the following key reasons:

  • The uncertain operational status of the Orbit bridge makes it impractical to incentivize TVL increases using its assets at this time. While the Klaytn Foundation is committed to supporting the Orbit bridge’s normalization, our immediate goal is to boost TVL and trading volume efficiently, which is currently limited by the use of Orbit bridge assets.
  • DragonSwap shows greater potential in enhancing KLAY value and promoting KLAY burning, as detailed in the appendix.
  • The use of Krill as an incentive presents uncertainties, and based on the information at hand, Aqua Space faces limitations in committing further due to Krill’s utilization constraints.

This decision does not diminish our support for Aqua Space and the Klaytn Foundation will continue to engage with Aqua Space and explore other support avenues.

Moving forward, we will next engage with the DragonSwap team to discuss the specifics of liquidity provision and incentives. All decisions will be made collaboratively, and we will explore various incentive strategies throughout this pre-test phase to ensure the success of the main D2I program.

Thank you to everyone involved in this pretest program, and we encourage you to stay engaged with the upcoming main D2I program.

Appendix : Fact Comparison

DragonSwap Aquaspace DEX
Initial Liquidity commitment DEX $4M $4.6M
Newly brought liquidity out of Klaytn $4M $0
Bridge Wormhole Orbit
Open Source O O
KLAY Burning Ratio to the exchange fee 6% 0.3%
Launch Date Feb 14th Feb 27th
LP Reward:Protocol Revenue 80:20 90:10
Governance at launch X X
Additional LP incentive X 10% of the trading fees, denominated in $KRILL

We are thrilled to have been accepted as the first project for Pre-D2I program.
We believe this is just the beginning of an exciting journey to help bolster Klaytn’s ecosytem.

Being part of the Pre-D2I Program will allow us to leverage Klaytn Foundation’s resources and support, further accelerating our development and paving the way for innovative DeFi solutions. This achievement underscores our commitment to delivering unparalleled value to our users and contributing to the growth of the Klaytn ecosystem.

We will share detailed plans through our Medium and X (Twitter) about how we intend to utilize the resources and support from the D2I Program to bring innovative DeFi solutions to the Klaytn ecosystem.

Best regards,
The DragonSwap Team.


Hi Klaytn people,
I’m happy to introduce Nectar, a new rising star in Klaytn ecosystem and apply for the pre-test program. Please read it thoroughly and let me know if you have questions to understand Nectar clearly.

  • Who is Nectar?

    • Nectar is an order book based hybrid DEX, allowing users to trade securely with CEX-like API and UI/UX, eliminating concerns of bank runs.
    • Since the summer of 2023, even before Project Dragon was unveiled, Nectar has strategically focused on the Klaytn ecosystem, aiming to elevate Korean blockchain projects to global prominence. Composed of two engineers and one business developer, the team has swiftly built a complete exchange infrastructure in just six months proving robust engineering foundation and extensive industry experience. We’re currently running on Baobab testnet and are ready to ship to Cypress Mainnet.
    • Nectar begins with a $KLAY-based spot market and plans to launch a perpetual market in 2024 H1.
  • Why Nectar in the Klaytn ecosystem?

    • By implementing Account Abstraction with gas optimization, it has enhanced convenience and reduced gas fees by up to 90%.
    • Unlike traditional AMM DEXs, its order book approach eliminates impermanent loss (IL) and slippage through limit orders.
    • It also supports the Kaikas wallet, actively backing the Klaytn ecosystem and enabling users to easily manage and trade $KLAY and various KCT assets.
    • Many KCT assets are only traded on DEXs, unlike $KLAY, which is listed on several CEXs. AMM DEXs, due to their structure, pose a burden on retail users with slippage and Impermanent Loss (IL). Creating an order book market denominated in $KLAY is a significant contribution to facilitating active KCT token trading for retail users within the Klaytn ecosystem.
    • An order book-based hybrid DEX will uniquely and significantly contribute to the Klaytn ecosystem by diversifying it and easily onboarding users from Web 2 exchanges.
    • Other chains like zkSync with GRVT and Arbitrum with Vertex are nurturing order book hybrid exchanges. Klaytn is at a point where it also needs an order book hybrid exchange. :dragon:
  • How to supply liquidity on Nectar?

    • Unlike traditional AMM DEXs, in an order book-based DEX, market makers play a crucial role instead of liquidity providers. This means standards used by AMM DEXs (e.g. DragonSwap) may differ.
    • Liquidity centered around order book-based market makers: Market makers means any market participants making spreads on order books. They play a significant role in Nectar. Nectar plans to issue differential airdrop incentives for $NECTAR tokens based on the activity of market makers. Market participants interested in the airdrop will actively engage in the market.
    • Because their operational mechanisms differ, there will always be price differences between AMM DEXs and order book DEXs. Users seeking efficient on-chain arbitrage will use Nectar alongside AMM DEXs.
    • As a starting point, we will create and provide liquidity for the following market pairs:
      • We plan to quickly list other markets through partnerships, all featuring a fixed fee of 0.2%, including gas fees.
  • What are the incentives to trade on Nectar?

    • 60% of the incentive tokens supported by the foundation will be directly rewarded to market makers, 30% for gas fee subsidization, and 10% for a referral bonus to bring more market participants.
    • Performance-based market maker rewards: A reward program based on the performance of market makers encourages active trading activity and contributes to Nectar’s liquidity. Effective order book spread creation, transaction numbers, and volume are the main criteria, with incentives distributed differentially from the top market makers based on factors like:
      • Transaction volume (60%): Higher volume transactions rank higher, being the most crucial criterion.
      • Number of transactions (30%): Following transaction volume, the number of transactions is vital to support market makers facilitating trades for retail users with smaller volumes.
      • Effective order book spreads (10%): Rewards increase as market makers create denser spreads closer to the market price, encouraging takers to trade.
    • Gas fee subsidy: We plan to provide benefits to market makers and traders through a trading fee discount system based on $KLAY holdings. Additionally, a Zero Trading Fee event will be held for a specific period to make Klaytn on-chain trading easy and affordable.
    • Referral: Rewards will be given to verified referrers through email authentication, payable only if the invitee participates in trading.
  • Does Nectar burn $KLAY?

    • Yes. Nectar will burn 5% of its trading fee revenue generated in $KLAY.

Questions & Partnership Inquiries to → tg: @realjooddang
Join the Nectar community → Telegram: Join Group Chat

Thank you,


I personally love the idea of hybrid amm on Klaytn / Dragon ecosystem. Also, with orderbooks, token circulation and arbitraging would be easier as well.