How Does Kinesis Network Quickly On-Ramp the Supply
Challenges of Retail Staking
DePIN networks are permissionless and trustless. Since node operators are not vetted for trustworthiness or reliability beforehand, a security deposit is required to ensure proper behavior. This deposit, known as a stake, involves placing a certain amount of the network’s native tokens into escrow. If a node misbehaves, its stake can be slashed. This financial incentive helps maintain a high level of service reliability (SLA) and assures the network’s users that nodes are acting in good faith.
In practice, however, acquiring and staking the platform’s tokens can be challenging for many retail participants. Consider the steps a supply node operator might need to navigate:
Transfer the native tokens to the nodes address. Which depends on...
Find an exchange or OTC market that lists the token and purchase it with another digital currency (e.g., USDT). Which depends on...
To obtain digital currency easily, open a CEX (centralized exchange) account and fund it by linking a bank account. Which depends on...
Ensure the bank account has sufficient funds.
Trust the chosen CEX, operate within a supported country, and possibly convert from the local currency to USD. Which depends on...
Have the money ready. Security deposits are designed to be large enough to dissuade bad actors, meaning substantial capital is required, even for those simply interested in donating compute resources rather than making money.
As you can see, safely and efficiently scaling the supply side of the network is a significant challenge. Kinesis Network introduces a novel approach to overcome these hurdles and enable global, viral-level supply growth while preserving the financial incentives that encourage nodes to behave well.
Introducing Investor Pools
Investors of all sizes can contribute to “investor pools.” Supply node operators can "borrow" from these pools to come online without any friction. Consider the experience for a typical gamer:
Visit Kinesis Network and download the program. (In the future, this software may come pre-installed through partnerships with computer manufacturers or game developers.)
Run the installer and accept the default settings.
When prompted, the user can choose to use their own Joule (the platform’s native token) or simply borrow from the investor pool.
That’s it! The node is online, with no need for a bank account, CEX account, or complicated transfers. The entire process takes just a few minutes.
While there is a DAO-run reference implementation, many such pools can coexist and compete with each other.
But What About Security?
If nodes borrow their security deposit, what ensures they behave well without having immediate “skin in the game”? Kinesis Network’s smart contracts handle this elegantly:
As the node starts earning rewards, it gradually repays the borrowed stake.
As repayments occur, the node’s borrowed stake is converted into its own earned stake.
From the moment it earns any Joule, the node begins building both its stake and its reputation.
With more stake (and thus a stronger reputation), the node receives more invitations to participate in network sessions, creating a virtuous cycle.
Nodes cannot receive unstaked payouts until they reach a minimum amount of self-earned stake. Likewise, they cannot withdraw their stake until they reach a certain threshold. This ensures that even borrowed participants are financially motivated to behave properly in the long run.
Win-Win-Win for Investors
Win #1: Rapidly increasing the supply of nodes enhances the network’s overall value, improving token utility and strengthening the ecosystem.
Win #2: Borrowed stakes earn interest for investors. The interest rate is managed by pool operators. For example, the DAO pool might adjust interest rates in response to supply levels, or other pool operators could differentiate themselves by offering lower interest rates or special incentives.
Win #3: Partners—such as gaming companies, hardware manufacturers, and influencers—can establish their own investor pools. By directing their audience to use their pools (for example, through custom installation links or specialized software versions), they can earn interest and exert more influence over the nodes they bring into the network. This model is akin to affiliate marketing, creating opportunities for aligned incentives and shared growth.
In summary, Kinesis Network’s approach to investor pools addresses the key challenges of retail staking by simplifying access, ensuring proper incentives, and creating a system in which all parties—investors, node operators, and the broader network—can benefit.
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