⛩️Kinto Token

This page describes the supply, tokenomics and mechanics of the Kinto token.

The Proto-governance proposal, ENIP2, introduces the $KINTO Token (or K), the governance token behind the Kinto network.

$KINTO Mechanics 🏦

The $KINTO token ensures that Kinto is owned by its users. We plan to distribute 70% of $K tokens to the community, dynamically rewarding participants for allocating capital, referring users, and developing financial applications.

K holders will share protocol ownership and vote on proposals through the dual-governance system explained in the Kinto Constitution, which is both an on-chain and off-chain governance system. If you are new to Blockchain governance, you can read more here.

We have designed the protocol with the goal of self-sustainability and governance-minimization. Coordination is a complex and expensive task. Members need assurances that the protocol is not going to change against their interests. Shareholders may change over time. In order to remain credible, the protocol needs to be resistant to value capture. Kinto has the smallest governance surface area needed to function, also known as β€œessential governance”.

The $K governance token will control the following:

  • Nios Election. The $K holders will vote to elect Nios every six months. Nios will represent $K holders in the network's day-to-day activities.

  • Constitutional Changes. Any changes to the constitution need to be ratified by $K holders explicitly.

The Nios will, in turn, reflect the will of $K holders and take action on the following:

  • Treasury Management. The DAO will decide how to allocate the fees collected by the Kinto sequencer along with the K tokens allocated to the community.

  • Network Fees. The DAO will control the different fees and configuration parameters of the Kinto L2.

  • KYC Providers. The network can to add/remove KYC Providers. DAO members will also be able to modify the parameters and configurations of these providers as long as they don't contradict the mission and values of the constitution.

  • Integrations. DAO members will be able to coordinate integrations and partnerships with other DeFI protocols, institutions, and services into the network.

  • System upgrades. Proposals can upgrade several core components of the protocol like the bridge, the wallets or oracles.

Handing over the πŸ”‘

The team will execute toward progressive decentralization. The founding team aims to create a secure and usable protocol that reaches protocol-market fit. The ultimate goal is to remove any dependency from the founding team as soon as it is viable. You can find more about the different governance changes in the Kinto Constitution.

$K Distribution πŸ“Š

As mentioned, Kinto is designed to be owned by network participants. The core team and the investors will provide the capital and work required to decentralize the project. The team has token vesting to ensure long-term sustainability. Here are the details:

Token Name: Kinto (K)

Initial Token Supply: 10M (10,000,000) * Max Token Supply: 15M (15,000,000)

The initial token supply will be distributed as follows.

  • Kinto community members (55% initial token supply/ 70% of max token supply). These tokens will be distributed to users, developers, and partners. After inflation is enabled and the maximum supply is reached, 70% of tokens will be allocated to the community.

  • Team & Advisors (20% initial token supply/ 13% of max token supply). Founding team members will have a linear four-year vesting with a one-year lock period.

  • Investors (25% initial token supply/ 17% of max token supply). 3/4 have already been allocated to existing investors. The rest will be used to raise funds for the foundation.

Community Distribution

The initial 5,500,000 community tokens allocated to the community will be split as follows:

  • 500,000, (5% of the initial supply) will be allocated to Engen Members. Launch members will receive tokens proportional to the Engen credits they accumulated.

  • 2,000,000 in Participation Mining rewards for the community. Based on performance, they will be awarded to community users, liquidity providers, referrers, and developers. Most of the yearly inflation will also be allocated to the mining program, up to 5M tokens or 33% of the max token supply.

  • 1,000,000 reserved for the $Kinto liquidity event and additional liquidity mining programs.

  • 2,000,000 for the protocol treasury to fund new initiatives and pay contributors.

The majority of the community tokens will be split between different participation mining programs and initial liquidity programs. The mining program will last 10 years, and rewards will decrease slowly.

*Note on Inflation: Governance holders can propose an annual inflation rate (capped at 5%) to guarantee the protocol's sustainability. Inflation will always go to the treasury before being allocated to other alternatives. We expect most of the inflationary emissions to be assigned to the mining program

Enabling Transferability

The Kinto token will be deployed as a non-transferable token. As reflected in the Kinto Constitution, once the network and community have grown and mitigated the financial, technical, and market risks, the DAO can enable transferability, which could catalyze a potential public listing event.

The requirements to enable transferability on the token are two:

  • 20% of token float. To avoid launching with a low float but high FDV, at least 20% of the tokens must be fully unlocked and distributed to participants.

  • Governance has reached Phase 2. The first Nios elections were held, and the roll-up achieved Stage One.

  • $100M in TVL. The network TVL has to pass and stay above $100M for four weeks.

The Seed Round 🌱

The founding team has secured $7M in funding, the latest round being completed at a $100M valuation. We have intentionally raised this seed round from many value-add investors. We are lucky to have 30+ members who will help the founding team refine and launch the protocol.

Our non-exhaustive list of investors and angels includes:

Spartan Group, Parafi, Robot Ventures, Kyber Capital, Modular Capital, Tane Labs, Skybridge Capital, and notable angels like Santiago Santos, Jason Yanowitz, and Manu Araoz.

Legal Disclaimers

This announcement has been written and published by Kinto Foundation. (β€œKinto Foundation”). The directors and officers of Kinto foundation owe fiduciary and contractual duties solely to Kinto Foundation investors.

The Kinto Token confers no information, voting, economic, fiduciary, contract, or other rights against or with respect to the assets or personnel of the foundation. The interests of Kinto Foundation and its directors, officers, and investors may differ materially from the interests of Kinto holders, protocol users, and other active protocol participants.

Kinto Foundation provides no guarantee, commitment, or undertaking to utilize any of its assets, funds, properties or personnel, Kinto users, or other Kinto protocol participants. Kinto Foundation does not owe and does not intend to assume, any duties or obligations to Kinto token holders, users, and other protocol participants, other than duties or obligations arising under laws of general application, such as non-waivable torts. Moreover, Kinto Foundation has various legal, fiduciary, and contractual obligations that could conflict with the interests of Kinto holders, Kinto users, and other Kinto protocol participants.

To the maximum extent permitted by applicable law, all software relating to the Kinto protocol is being provided on an as-is, where-is basis, with no representations or warranties being made to Kinto token holders, protocol users, or other Kinto protocol participants and with no liability to Kinto Foundation or any other person involved in the development of the Kinto protocol. The statements set forth in this announcement also are not intended to be representations, warranties, guarantees, or assumptions of duty or liability of any kind, and Kinto Foundation hereby disclaims the foregoing and will not be liable for any damages arising from the use of the Kinto network or the Kinto Token.

In the event of any conflict or inconsistency between this announcement or any other communication and the terms of any software license involved in the Kinto protocol, the terms of the software license shall govern to the exclusion of this announcement and such other communications.

The forward-looking statements in this announcement are subject to numerous assumptions, risks, and uncertainties that are subject to change over time. Such assumptions, risks, and uncertainties could cause actual results or developments to differ materially from the results and developments anticipated by us. Even if our anticipated results and developments are realized, such results and developments may nevertheless fail to achieve any or all of the expected benefits anticipated by this announcement.

We reserve the right to change the plans, expectations and intentions stated and implied herein at any time and for any reason or no reason, in our sole and absolute discretion, and we undertake no obligation to update publicly or revise any forward-looking statement, whether as a result of new information, future developments or otherwise.

This announcement is for information purposes only and does not constitute an offer to sell or a solicitation of an offer to buy any interests in Kinto Foundation or any other securities. This announcement is not intended to provide legal, financial or investment, or other advice and we recommend that you do not rely on, and do not make any financial or other decision based, on this announcement.

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