It fires via weighted impact (typical) and features recoil dampening and minimal-friction loading systems not seen elsewhere. My entrant to any applicable K'nex gun contests.
A few exotic parts were used, firstly a metal spring that fits around a K'nex rod. Also, to make this, you will need to mutilate three dark grey connectors by cutting off their tops (remove half of the circle). Though you could get the spring at any hardware store, you can use rubber bands in its place.
Step 1: -back end- The pile driving shaft.
On the SPRING - it is extremely effective to use one here. You can get springs like these that wrap around K'nex rods at hardware stores (best bet) or from hobby stores (remote control cars) This is how the power is converted.
GREY ROD + ORANGE CONNECTOR -> BLUE ROD -> RED ROD (Projectile)
(Several rubber bands) (spring-loaded)
Let's save adding the grey rod for last.
Because the blue and red rods together still have less total mass than the grey rod hitting them, their velocity will match whatever speed you can get the grey rod to reach, assuming the laws of physics and transferrence of energy. The spring acts as a shock absorber, preventing any extreme stresses on the K'nex parts and returning to optimal position again.
Yours may need to be tuned differently from mine to keep the blue rod in the perfect place, but you'll understand this better once it's complete.
If you don't want to use a spring, rubber bands (fourth picture) are an alternative, although I've so far not had much luck with them. Loss of strengh.