Vespertine Capital
3 min readFeb 26, 2022

Kyoko goes big with DAO-to-DAO lending

Source: Kyoko Website

As the pay-to-earn industry has started to take off, guilds have also popped up to support the number of gamers and games that have skyrocketed in the past year or so. There are over 3,000 guilds today, according to the popular guild management platform BlockchainSpace, and the number grows every day.

Alongside increasingly unaffordable entry prices for play-to-earn games, guilds and gamers alike face another problem. Each day brings new games to the market — and while many of these are based on popular blockchains like Ethereum, Solana, or Polygon, many are not. The sheer number of blockchains that host games have led to siloed in-game assets. For example, Axie Infinity operates on its own private game chain named Ronin, while Splinterlands is built on the Hive blockchain. In other words, because these two blockchains don’t speak the same language, players can be rich in one arena and poor in another. The top player in Axie Infinity would be starting from scratch in Splinterlands.

Kyoko hopes that its cross-chain GameFi NFT lending platform will make this a thing of the past. Built for both guilds and gamers, it wants to solve the most pressing issues challenging the GameFi market, which is the rising cost of entry and siloed in-game assets across different blockchains. Their original vision was to provide guild-to-guild lending, since guilds require a substantial amount of cash to maintain operations and grow their capabilities.

Source: Kyoko Medium

That idea has since evolved into something even bigger and better. Since guilds are typically governed by DAOs, what if Kyoko could offer DAO-to-DAO lending, seeing as other DAOs might also have a use for credit.

DAOs that need additional liquidity can come to Kyoko’s DAO-to-DAO lending platform to apply for whitelist access and receive unsecured credit loans. The credit can be used to borrow USDT, and DAOs that require higher credit limits can lock ERC-20 tokens, $KYOKO tokens, or NFTs into the Kyoko Vault as collateral. The amount of credit would then be based upon the creditworthiness of the organization, the amount of collateral provided, and the amount of liquidity in Kyoko’s DAO-to-DAO lending liquidity pool.

In addition, early-stage DAOs that are full of potential but need additional resources can apply for credit loans. Upon passing Kyoko’s due diligence evaluation process, whitelisted DAOs can then acquire the resources they need to grow their operations.

Credit loans will be drawn from a liquidity pool, and liquidity providers will earn interest income from borrowers’ interest payments, while also mining $KYOKO tokens.

Kyoko’s DAO-to-DAO lending platform is expected to be released in Q1 of 2022. In addition, Kyoko’s metaverse will also allow guilds to display their history, progress, and other accomplishments, while gamers can connect with others in a world that can be built in, developed, and sold off.

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