Summary
We propose restarting KITE emissions to incentivize the minting of HAI stablecoins against select high-leverage, high-alignment collateral types. This includes haiVELO, alETH, and alETH/WETH Yearn autocompounding LP tokens.
These incentives will reignite protocol growth and deepen alignment with key partners—most notably, Alchemix—while activating the newly live KITE staking system, which now gives KITE holders real utility and influence over minting rewards and protocol yield distribution.
We request 10,000 KITE from the HAI DAO Treasury for a trial incentive program, beginning with 50 KITE/day allocated to minting HAI against the specified collateral types.
Reward Distributor Contract: 0xfEd2eB6325432F0bF7110DcE2CCC5fF811ac3D4D
Context & Rationale
KITE emissions were previously paused due to a lack of utility and value sink. Today, that has changed. With the introduction of KITE staking, emissions now flow back into the system: staking KITE boosts both the minting incentives for HAI and the yield earned on haiVELO collateral via protocol-owned veVELO.
This unlocks a powerful flywheel:
- Users deposit haiVELO as collateral
- Earn yield from protocol-owned veVELO, converted to HAI and distributed to depositors
- Mint HAI against that collateral and earn KITE incentives
- Stake the KITE to boost their own yields and incentives
- Repeat — fueling a circular, positive-sum system
This flywheel is about to be supercharged through our new partnership with Alchemix.
Strategic Partnership with Alchemix
Alchemix has committed to:
- Depositing significant alETH and alETH/WETH Yearn autocompounding LP vault tokens as collateral into the HAI protocol
- Minting HAI against those positions
- Providing deep liquidity to HAI/alETH and HAI/alUSD pools on Velodrome
- Directing veVELO votes to these LP pairs to attract VELO emissions
- Compounding earned VELO emissions into haiVELO to enter the flywheel
- Staking all KITE incentives they earn, further aligning long-term incentives
This aligns perfectly with the HAI Protocol's mission and architecture, and represents a model partnership where all parties are participating in and reinforcing the same system.
Request
We propose allocating 10,000 KITE from the DAO Treasury for a trial run, distributed as follows:
- Daily Allocation: 50 KITE/day per collateral type
- Duration: ~60 days (or until full allocation is emitted)
- Collateral Types Incentivized:
- haiVELO
- alETH
- alETH/WETH Yearn Autocompounding LP Vault Tokens
KITE rewards will be distributed proportionally to HAI minted against these collateral types. Additional rewards can be unlocked through KITE staking, increasing personal multipliers and yield.
KPI & Success Metrics
To determine the effectiveness of the trial program, the following metrics will be tracked:
- % of KITE earned that is staked vs. sold
- TVL growth across incentivized collateral types
- Net new HAI minted
A successful trial will demonstrate:
- Minimal KITE selling pressure (strong staking participation)
- Significant increase in TVL
- Growth in HAI supply backed by productive, yield-bearing assets
If these indicators are met, the DAO can consider extending the program, increasing daily emissions, and expanding incentives to other collateral types.
Conclusion
This proposal reactivates KITE emissions with a clear utility loop, aligned ecosystem partners, and measurable outcomes. The newly introduced KITE staking system allows for a sustainable, self-reinforcing mechanism that turns every minted HAI into fuel for protocol growth.
It’s flywheels on HAIwheels on flywheels — let’s spin it up.
For: Allocate 10,000 KITE from the treasury to reintroduce emissions for HAI minting incentives against haiVELO, alETH, and alETH/WETH Yearn LPs.
Against: Do not restart KITE emissions.
