wg_kre_lending.md

Reducing inflation while creating an additional use-case for Kin

Addendum to NEA KRE 4 Proposal

Inflation is a topic that affects most economies, including in the digital space.

However, DeFi has matured to the point where the unique properties of the KRE can be put to work with existing DeFi platforms.

Given that:

1. Kin is the most used currency on Solana
2. There exist thousands of users who hold Kin (for speculative gain)
3. Lending platforms have become established on Solana
4. The Kin Foundaton has reserves of Kin sufficient for decades

The foundation should:

1. Work to partnering with the lending platforms to include Kin as one of the lended currences
2. Allow users holding this Kin to deposit on these platforms to create borrowing opportuniteis for Kin
3. Borrow these reserves to supplement KRE disbursements
4. Pay this interest slowly over time

This creates a situation where:

1. Kin holders have a space to earn interest on deposited Kin (additional use-case)
2. Massively slows down inflation through the KRE, by using already circulating Kin
3. Has fine grained control over inlation, where they are able to postpone it and release it according to the requirements of the economy

This is similar to how states decide whether to increase inflation by printing more currency, or postpone it/ control it by issuing bonds. Additionally, the interest rate of these bonds is controlled transparently by these lending platforms.