This post marks a new beginning of Kepler. First, a bit of philosophy (for those not interested, pls jump to business down here).
Most of capital formation in the web2.0 world has been orchestrated by actors different from the ones who would ultimately be affected by its utilisation and allocation. Not all of it has been a design choice but a matter of limitation of our systems which could not be participatory and consensus-driven for the sake of efficiency. With access to capital being THE biggest driver of any wealth creating and multiplying activity, it is not a long shot to say that much of wealth of nations is currently either unrealised or locked up as dead matter — the current capital-distribution models favour a few, not the majority who is affected by it and have participation barriers. With the blockchain adoption becoming mainstream and web3.0 development gathering pace, it’s our vision at Kepler to create a more equitable world of opportunities through reimagining the future of how income accumulation and distribution happens through the holy grail of capital formation — investment.
The problem
We do not have a truly participatory and inclusive system of capital management and allocation. At this point, it is evidently clear that the current agents responsible for creating and compounding wealth in an economy have not been the most effective and have, in fact, at times completely failed the system (I don’t think we need any examples here). Centralised decision-making, incentive misalignment and questionable moral behaviour are just some of the lacunae. Private capital management could solve some, but not all of these problems. These problems pose a hidden, unaccounted cost to the entire global financial system thus impacting how agents of capital formation (a.k.a. you, a citizen of this world) act and coordinate to generate wealth.
The free market for capital has never truly been free.
It’s our fundamental belief that ANYONE can be an agent of wealth formation if given an equal access to the capital markets. Crudely — everybody who wants to produce and sell a table should be able to produce and sell a table if given an equal opportunity to borrow money and purchase wood from the market.
Currently, this doesn’t happen. Well, not at least at the same market terms for everybody. The beginning of wealth formation is a skewed activity. Growing wealth even more so. Investments are the primary driver for income compounding and accumulation. Be it of a nation, of an industry, of a group of agents, a single agent, anything. Access to financial tools that let one invest thus becomes a critical part of the wealth accumulation flywheel. An agent borrows, invests that capital into factors of production which leads to capital formation the profits from which get distributed to other economic agents and some are ploughed back to create more capital. S/he borrows again against the formed capital and the virtuous cycle of economic prosperity continues. Easy, right? Well, not unless our financial system makes it a global level playing field for everyone to access this capital and other factors of value creation.
Don’t get me wrong. Value is being created exponentially everyday even today, given how the world is sitting on $100Tr worth global GDP. What I’m insinuating here is that this number could’ve been much larger if access to financial institutions was more democratised at a global level. As an Argentinian, what if I could borrow cheaply from the free capital markets and create hundreds of jobs not worrying about the ballooning cost of capital in my country? And think about how true this is for billions of people across the globe. Like a Rwandan worrying about hyperinflation eating into her returns from the best investment tools she’s got access to locally (which are globally quite inferior). You get the idea.
While little by little, the world’s $700Tr worth of assets would being tokenised in the coming years, to make sure we don’t repeat the mistakes of the bygone era, we need to make this value transfer more equitable and uniformly accessible for the resulting value creation to be truly expansionary (think of it this way — Uber expanded the ride hailing market by more than 10x all thanks to mobile technology that made the whole process frictionless, non-discriminatory and easily accessible to anyone with a mobile and internet connection).
How is Kepler solving this problem?
Kepler’s mission is to become a consensus-driven, permission-less, frictionless investment vehicle which allows everyone to be a party to the growing future of DeFi.
What if we can set up a virtuous wealth creation flywheel that in steady state raises liquidity in its treasury, allocates these reserves into investment opportunities across the DeFi world, accrues profits from the investment, distributes the profit to stakeholders — and does this on a loop? This is the vision of Kepler.
Where this flywheel breaks in the world today is that there is massive misalignment between capital providers, the gatekeepers of capital distribution and the consumers of capital.
Now what is all three parties were the same person? This is the kind of capital efficiency are Kepler proposes to build with its treasury-backed investment protocol which is greatly inspired by OlympusDAO’s innovative approach.
We work on three key principles which much like Kepler’s laws, are axioms of our vision and mission.
Law 1: Everything at Kepler revolves around the community at its focus.
From policies to strategy, we will build the protocol grounds up with the community and make sure that at every step, it’s the interest of the community that is being served.
Law 2: Every community member will have an equal chance to take part in and benefit from the growth of the protocol
No KEEPer left behind. Our primary goal is to promote equal participation in owning and benefiting from the treasury. All you have to do is be a KEEPer and take part in good governance from time to time. We rely on your support to make Kepler a part of the better future of finance.
Law 3: Wherever possible, the protocol will try to achieve a state of lowest standard deviation in token distribution amongst its community of KEEPers.
Opportunity isn’t equal when we stand on different pegs of the same ladder. To get around this, at least in part, we will try to make our first sale (it’s gonna be on our Discord channel, so join as you read) as democratic as possible by allocating options to buy an equal amount of tokens. What you ultimately buy is up to you.
How does Kepler work?
PS: The technicalities of how the treasury would function is inspired from OlympusDAO’s staking and bonding mechanisms.
The native currency of the KeplerDAO is the KEEPER token (which will be held by, you guessed it — the KEEPers.). Each KEEPER is backed by a minimally valued treasury that consists of stable coins (Dai, USDT, USDC) and LP tokens from KEEPER-stable coin pairs. Whenever the total market cap of KEEPERs in circulation exceeds/falls below the minimally backed value, the treasury performs a profitable open market operation to restore the equilibrium price of KEEPER. What is key here is that the value of KEEPER in itself doesn’t change, its supply in the market does through the market operations. This way, every KEEPER token in circulation is backed by assets in the treasury.
This makes is possible for Kepler to assure a KEEPer that every token held by them would have a min intrinsic value below which it will never fall.
The reserves in the Kepler vault beyond a reserve rate (to be defined and revised by the DAO from time to time) are (of course) used to invest in protocols that the community positively votes on. More on the mechanics of this will be laid out in future articles and our Discord group. This is the heart and soul of our vision — to build a treasury that allows for the community to collectively participate in the upsides from investments into yield generating protocols and cool dApps while compounding their holdings.
The initial profit distribution from the treasury will be: 90% to stakers and 10% to the DAO (these allocations will be changed if necessary, as decided by the DAO)
Sounds cool, what do I do?
Well, for starters, participate in our discord offering and coin sale (details of which will subsequently be put onto our official handles and Discord channel). Once you have the KEEPER token, either stake it to earn TROVEs which auto-compound or deposit them in the alpha liquidity pools of Sushiswap/Uniswap LP tokens from where can be deposited back into the Kepler treasury to earn more KEEPERs.
Next, enjoy your returns and be a good KEEPer. That’s mostly it, KEEP it simple. :)
The tentative date for our alpha launch will be sometime in the last week of November. Watch this space for more details on that a little later.
For a detailed description of how the protocol works, visit our website or read the docs here. We’re truly excited to watch this community grow and make our vision a reality. Join us in this journey and become a KEEPer for life.
KEEPer OG
Follow us on Twitter, Medium and join the discussion on Discord to stay KEEPed in.
