🔁LST-KAIA Price Gap Resolution

KAIA-LST Stabilize Protocol aims to reduce the price disparity between Liquid Staking Tokens (LST) and KAIA, while providing an instant unstaking feature. Currently, there is a price difference between KAIA and LST due to the demand for immediate unstaking (swap), with SKLAY experiencing a discrepancy of about 2.5%. To address this price gap, the protocol undertakes the following processes:

1. Utilization of DAO Treasury: The protocol uses funds from the DAO Treasury to swap KAIA for LST.

2. LST Unstaking and KAIA Receipt: The swapped LST is unstaked, and KAIA is received approximately one week later.

By repeatedly executing these two processes, the protocol stabilizes the market price of LST to gradually align with KAIA. Additionally, any profits generated from this process are allocated to the DAO Treasury. This protocol provides LST holders with an immediate unstaking option and serves as a key mechanism to enhance the liquidity and stability between LST and KAIA.