Hi folks! The Hover Labs team has been approached by a centralized exchange who is interested in listing kUSD. Because of an NDA, we cannot reveal the name of the exchange.
In order to be listed, the exchange requires an authorized counter party. This counter party must be an entity (an LLC, partnership, etc) based outside of the United States and the owner must be either:
- A non-US citizen
- A US citizen who can prove residency outside of the US
The counter party will be required to do the following:
- Sign a Mutual Non-Disclosure Agreement (MNDA) with the exchange
- Sign a Listing Agreement with the exchange. Normally this would involve a listing fee, however, this is not required
- Serve as a point of contact between the exchange’s and the Hover Labs team during the exchange’s legal review of kUSD. Importantly, Hover Labs will be the responsible party for answering any legal queries, and the point of contact is simply a pass through.
- Likewise, serve as a point of contact between the exchange’s technical team and Hover Labs during the technical integration process. As above, Hover Labs will be responsible for answering these queries.
After exchange listing, it is highly recommended to hire a market maker. The counter party would also be responsible for appointing a market maker. Hover Labs and the exchange can recommend a market maker closer to that time, and the development fund could cover costs.
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Given that Kolibri is self-governed by a DAO, if the community is interested in pursuing a listing, the DAO will need to appoint a representative to carry out this process. We can do this by passing a governance proposal which authorizes (and optionally compensates) an entity to pursue this business on behalf of the DAO.
While Hover Labs may be an obvious choice, neither the corporate entity nor the members meet the requirements of a counter party as Hover Labs is a DE/USA based corporation and its members are US citizens living in the country.
We expect that the process of listing will require part time work over 1-2 months. The Kolibri protocol currently has 78k kUSD in the development fund which could be used to compensate an entity. Hover Labs makes no recommendations on what a reasonable amount of compensation for the counter party is, however, we recommend that compensation be transferred to a community-owned multisig and paid out in several tranches:
- ¼ at time of the proposal passing
- ½ at the time of listing
- ¼ at the time of hiring a market maker
To move forward, the DAO will need to source interested parties and any fees that party would want to charge. If there are interested parties, replying to this forum post is a great way to throw your hat in the ring.
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Standard Disclaimers: Nothing in this post is financial advice; Hover Labs is not a lawyer and nothing in this post constitutes legal advice.