In our previous posts, we discussed how KIVOT redefines the game in DeFi by creating a digital liquidity vault. Today, we’ll dive deeper into the heart of this protocol: The Eternal Pool. To understand its true genius, we must grasp why it was created, how it operates, and why every detail – from its launch price to its fees – is crucial.
Why Is the Eternal Pool Needed? The Problem with Traditional AMMs
Traditional Automated Market Makers (AMMs), like Uniswap and SushiSwap, revolutionized DeFi, but they possess a fundamental flaw: liquidity is temporary and can be withdrawn. Liquidity Providers (LPs) can remove their assets from the pool at any time. This leads to:
- “Rug Pull” Risk: Project creators can suddenly withdraw liquidity, leaving investors with worthless tokens and crashing the price to zero. Trust is constantly undermined.
- Liquidity Volatility: During periods of high volatility or low market depth, LPs may withdraw capital, which increases slippage and makes trading expensive and inefficient.
- Reliance on Incentives: AMM pools often rely on high APRs from yield farming or other incentives to attract and retain liquidity – but this is not sustainable in the long run.
KIVOT’s Eternal Pool is a direct answer to these problems. Its goal is to create the first-of-its-kind indestructible, autonomous, and self-sustaining liquidity.
How the Eternal Pool Works: The Unique Mechanism
KIVOT’s Eternal Pool is a KIVOT/USDC pool. But unlike standard AMM pools, two fundamental things happen upon its creation:
- LP Token Burning: All Liquidity Provider (LP) tokens, which represent a share of the pool, are immediately and permanently burned. This is the critical element: once LP tokens are burned, no one can withdraw liquidity from the pool. It is locked on the blockchain forever. Not even KIVOT’s creators have control over it.
- Impartial Mathematical Algorithm: The pool operates entirely based on mathematical formulas, without human intervention.
This means that KIVOT provides an absolute guarantee of 24/7, 365-day-a-year liquidity, regardless of market conditions or human actions.
Launch Price: Why $1 and the PMM (Proactive Market Making) Mechanism
KIVOT launched with an initial price of $1 per KIVOT token in the Eternal Pool. This is not by chance:
- PMM (Proactive Market Making): To ensure a fair and stable starting point, KIVOT uses a modified PMM model. This is an advanced approach to market making that aims to maintain the price around a specific point as the pool accumulates liquidity. It’s more complex than a simple x*y=k, but its goal is to provide an optimal launch phase.
- Accessibility and Clarity: A starting price of $1 makes KIVOT easily accessible for initial interaction and simplifies the understanding of its future price dynamics.
Why “Single-Sided” Liquidity (KIVOT Only)?
KIVOT only requires KIVOT tokens for initial pool funding from users who wish to acquire KIVOT. The concept is that KIVOT tokens are “put into” the pool in exchange for USDC, which is already inside. This differs from traditional AMMs, where you typically need to provide equal amounts of TWO assets (e.g., 50% KIVOT and 50% USDC).
- Focus on the Sole Purpose: KIVOT is designed to be the sole liquidity primitive. Its function is to be paired with USDC, not to be part of multiple two-sided pools that can become unbalanced.
- Simplification: It simplifies the process for users who want to acquire KIVOT, without having to balance two assets.
The 0.3% Fee: The “Engine” of Eternal Growth
Every transaction (buy or sell) within the KIVOT/USDC Eternal Pool generates a 0.3% fee. This is a standard fee often found in DeFi, but with KIVOT, it has a unique function:
- Automatic Reinvestment: Unlike other AMMs where fees go to LPs or a treasury, with KIVOT, they are automatically and immediately reinvested back into the Eternal Pool.
- Continuous Growth: This fee is the “fuel” that sustains the growth of liquidity in the Eternal Pool. The more trading volume there is (primarily arbitrage), the more fees are collected, and the deeper and more stable the pool becomes.
- Deflationary Effect on KIVOT: As liquidity in the pool grows (via USDC from fees) and the number of KIVOT tokens is fixed (10,000), the value of each KIVOT token organically increases. This is deflation caused not by token burning, but by an increase in their backing within the pool.
The Eternal Pool: The Backbone of a Sustainable DeFi Future
KIVOT’s Eternal Pool is more than just a place to trade; it is proof of the possibility of creating a completely autonomous, sustainable, and reliable liquidity mechanism in the decentralized world. It eliminates human risk, provides endless liquidity, and allows for organic value growth, making KIVOT a truly fundamental primitive for the future of DeFi.
