1. Governance Mechanism
The KAITO token enables decentralized governance, allowing holders to propose, vote on, and implement protocol changes. Governance is implemented via smart contracts that manage proposal submission, voting, and execution. Token holders stake $KAITO to participate in governance, with voting power proportional to the staked amount. Proposals are executed automatically upon reaching a quorum and majority approval. Key smart contract functions include submitProposal, vote, and executeProposal.
The weight is computed in a highly specific way. The mapping of holder votes (there also exist Genesis NTF votes, which are not considered here because they are not connected with the design of $KAITO) to sKAITO is dynamically recalculated. Each sKAITO is capped at 0.0001% of Total Voted Yapper Votes. The mapping is given by
Where:
- the score determined by the longest uninterrupted holding period for sKAITO without an Adjustment Event
- time-weighted sKAITO voted for a particular project over the most recent 7-day period
- dynamic rate based on total Yapper Votes and Genesis NFTs voting pool
The -score is a function of a logarithmically transformed holding time (without an Adjustment Event, see below), which has a value of unity when the user's holding time equals the weighted market average.
An Adjustment Event is triggered if any of the following conditions are met:
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The current holding falls below 90% of the maximum holding in the past 30 days.
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The current holding falls below 80% of the maximum holding in the past 60 days.
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The current holding falls below 70% of the maximum holding in the past 90 days.
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The current holding falls below 60% of the maximum holding in the past 180 days.
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The current holding falls below 50% of the maximum holding in the past 360 days.
The Time-Weighted Score (t) measures how long a user's votes remain in a project compared to the weighted average among all voters over 7-day period (calculated and refreshed every hour). It is also a modifier which equals unity when the user's votes have been allocated to the project for an exact weighted average.
Key Parameters:
Quorum Threshold: Minimum percentage of staked tokens required for a proposal to be valid.Voting Period: Duration during which votes can be cast for a proposal.Execution Delay: Time delay between proposal approval and execution to allow for review.
2. Network Utility and Medium of Exchange
$KAITO serves as the primary medium of exchange within the Kaito ecosystem, facilitating transactions for services like Kaito Pro and Kaito Connect. The token is integrated into the ecosystem's payment gateway, which uses smart contracts to handle transfers, escrow, and fee distribution. Transactions are processed on-chain, with gas fees optimized for efficiency. The payment gateway supports cross-chain interoperability via bridges to other blockchain networks.
Key Parameters:
Transaction Fee: Percentage fee deducted from each transaction, redistributed to stakers.Gas Optimization: Algorithm to minimize gas costs for frequent transactions.Bridge Contracts: Smart contracts enabling cross-chain transfers of $KAITO.
3. Incentive Alignment and Staking
Staking $KAITO aligns long-term incentives by rewarding participants with additional tokens and governance rights. Staking contracts lock tokens for a vesting period, during which stakers earn rewards based on a dynamic APR. Rewards are distributed via a mint-and-burn mechanism to control inflation. The staking contract includes functions for stake, unstake, and claimRewards.
Key Parameters:
APR Calculation: Dynamic rate based on total staked supply and ecosystem growth.Vesting Period: Minimum lock-up period for staked tokens to earn rewards.Reward Distribution: Frequency and method of reward distribution (e.g., daily or weekly).
4. Ecosystem Growth and Liquidity Incentives
A portion of $KAITO is allocated to liquidity providers (LPs) to ensure market stability. LPs deposit tokens into automated market maker (AMM) pools and earn trading fees and additional $KAITO rewards. The liquidity mining program is managed by smart contracts that track LP contributions and distribute rewards proportionally.
Key Parameters:
LP Reward Rate: Percentage of trading fees and $KAITO rewards allocated to LPs.Pool Weighting: Adjustable weights for different liquidity pools based on ecosystem needs.Reward Vesting: Lock-up period for LP rewards to prevent short-term dumping.