This section outlines Kambria’s strategy for establishing and managing decentralized exchange (DEX) liquidity for KAT POL during the migration from Ethereum/BSC to Polygon. The strategy prioritizes stability, integrity, and sustainable early growth, while minimizing risks associated with low-liquidity environments.

Kambria’s liquidity approach is phased, cautious, and grounded in long-term token utility development across Kambria DAOs.

1. Objectives of the Liquidity Strategy

Kambria’s DEX liquidity strategy is designed to ensure:

1.1 Stable Early Price Discovery

Provide a fair and predictable token price environment during the transition period.

1.2 Market Integrity & Protection

Guard the ecosystem against manipulation, aggressive dumping, and extreme slippage-driven volatility.

1.3 Sustainable, Utility-Driven Growth

Enable liquidity to expand over time in response to real usage across Kambria DAOs, not artificial trading incentives.

1.4 Community Safety

Prevent premature exposure of community members to risks such as impermanent loss (IL) during the early migration phase.

 

2. Phase-Based Liquidity Approach

Kambria adopts a two-phase model to manage liquidity development.

Phase 1 - Controlled Launch (Months 0–2)

Liquidity is fully managed by Kambria. Community LP is not opened.

Goals

• Stabilize early migration
• Maintain clean, predictable price discovery
• Protect the pool from manipulation
• Observe early trading behavior
• Avoid exposing community to IL risk

DEX Parameters

• DEX: Uniswap v3 (Polygon)
• Pair: KAT POL / USDT
• Reference Price: 1 KAT = 0.00003 USDT
• Fee Tier: 1%
• Range: Full Range
• Seed Liquidity:
  • 2,000 USDT
  • 66M KAT POL

Rationale for Controlled Liquidity

• Small initial liquidity (<$2,000) can experience high slippage; community LP would be risky.
• Controlled LP prevents price manipulation through range settings.
• Full-range LP ensures always-active liquidity with zero maintenance.
• A single pool avoids liquidity fragmentation and simplifies monitoring.

Phase 2 - Community Liquidity Participation (Months 2–3+)

Community LP will be introduced only after the ecosystem stabilizes.

Conditions to Enter Phase 2

• Monthly conversion flow stabilizes
• KAT POL utility in DAOs is active
• Price behavior becomes predictable
• Community education materials are ready
• Secondary pool plan finalized (QuickSwap KAT/MATIC)

Planned Enhancements

• Community LP guidelines (risk, ranges, IL)
• Optional LP incentives (DAO-specific privileges or badges)
• Additional pool: KAT/MATIC on QuickSwap
• Gradual increase in total liquidity
• Collaboration with aligned partners for safe liquidity expansion

This ensures community participation happens responsibly and safely, without exposing users to unexpected IL.

 

3. Slippage & Market Protection Mechanisms

Kambria uses structural safeguards to protect the early liquidity environment:

3.1 Small Initial Liquidity

Ensures large trades face high slippage, discouraging manipulative dumping.

3.2 Full-Range Position

Simplifies management and prevents inactive LP ranges.

3.3 High Fee Tier (1%)

Reduces attractiveness of rapid speculative trades and arbitrage exploitation.

3.4 Monthly Conversion Capacity (5M KAT)

Limits how much new KAT POL can enter the market each month, preventing supply shocks.

3.5 Small-First Conversion Ordering

Ensures community users convert first; large holders must wait their turn.

3.6 Unique Burn Transaction Requirement

Blocks automated batch requests and slows down potential attackers.

Together, these mechanisms maintain stability, predictability, and fairness.

 

4. Secondary Pool Strategy (Phase 2)

A second liquidity pool will be introduced only after Phase 1 stabilizes.

Proposed Pool

• DEX: QuickSwap
• Pair: KAT POL / POL
• Fee Tier: 1%
• Range: Full Range
• Seed: 300–500 POL + proportional KAT POL

Purpose

• Improve accessibility for Polygon-native users
• Enable natural arbitrage between USDT and POL markets
• Increase long-term liquidity depth
• Support community LP participation

This pool is explicitly not launched in initial setup.

 

5. Liquidity Governance

Kambria reserves the ability to adjust liquidity parameters based on:

• Migration demand
• Community feedback
• DAO utility expansion
• Market conditions
• Risk assessment

Governance is performed internally to maintain the stability of the ecosystem during migration.

Changes will be communicated publicly and documented.

 

6. Long-Term Outcome (1–2 Years)

As the migration stabilizes and KAT POL becomes integrated into DAO processes, Kambria’s DEX liquidity model evolves toward a community-governed, utility-driven state.

6.1 Increasing Community Ownership of Liquidity

Over time, liquidity becomes increasingly community-owned, distributed among contributors, DAO members, partners, and long-term supporters rather than concentrated in Kambria’s treasury.

6.2 Trading Stabilizes Through Real DAO Usage

Price stability and liquidity depth begin to reflect:

• Contribution activities
• Multi-stakeholder reward cycles
• DAO privileges and participation
• Ecosystem demand for KAT POL

Rather than speculative trading.

6.3 Liquidity Reflects Real Economic Activity

Rather than artificial “market making,” liquidity grows alongside:

• DAO project revenue
• Contribution staking
• Privilege unlock mechanisms
• Partner integrations

6.4 No Dependence on Fake Volume or Wash Trading

Kambria’s long-term position remains:

• No artificial volume campaigns
• No wash trading
• No forced price action
• No inorganic liquidity injections

KAT POL’s market structure becomes a reflection of ecosystem value creation, not speculation.

 

7. Summary Table

Component	Phase 1 (Launch)	Phase 2 (Stabilization)	Long-Term (1–2 Years)
LP Ownership	Kambria only	Kambria + Community	Mostly Community
Pools	KAT/USDT	+ KAT/POL	Expanded multi-pool ecosystem
Fee Tier	1%	1%	1% or diversified
Range	Full Range	Full or guided	Community-selected
Liquidity Size	Small	Gradual growth	Utility-driven growth
Community LP	No	Yes	Primary liquidity source
Market Behavior	Protected, controlled	Predictable & growing	Driven by real demand
Price Formation	Kambria-led	Market-led	Ecosystem-led