Tokenomics

The values outlined in this section have undergone extensive deliberation within the KuSwap community and have been formally approved through the voting process by KUSGOV.

A. Initial Supply Distribution

The initial supply of KUS tokens in KuSwap v3 (KUSv3) will be set at 36,920,000*. This allocation is designed to cover the following:

  1. Existing Holders (32,000,000 KUS or 86.67% of the initial supply)* A. Migration of Existing KUS Holders B. Migration of Existing KUSGOV Holders C. Migration of KUS LP Pairs

  2. Team: (2,520,200 KUS or 6.83% of the initial supply)

  3. Holder Bonus Pool (369,200 KUS or 1% of the initial supply) KUS Holders who migrate early will receive more rewards than those who do it later. The process will be detailed in Part 3: Migration Strategy.

  4. Airdrop to KUSGOV Holders (738,400 KUS or 2% of the initial supply) Tokens will be airdropped to KUSGOV holders who lock into KUSGOV before the snapshot date. The details will be announced in Part 3: Migration Strategy.

  5. Airdrop to Early KUS LPs (553,800 KUS or 1.5% of the initial supply) Tokens allocated for Liquidity Providers. The details will be announced in Part 3: Migration Strategy.

  6. Airdrop to KUSFOX and KUSFOXES Holders (369,200 KUS or 1% of the initial supply)

  7. Airdrop to Migration Community Activities (369,200 KUS or 1% of the initial supply)

B. Emissions Allocation

In KuSwap v3, the emissions will be distributed as follows:

  • LP Rewards and Rebase (88%)

  • Team (9%)

  • Marketing: (3%)

C. Emissions Decay

Decay: To maintain a sustainable emission model, a decay of 1% will occur at the end of every epoch (week), gradually reducing the emission rate over time.

D. Maximum Supply and Minting Governance

The maximum supply of KUSv3 tokens in KuSwap v3 is set at 47 million. However, veKUS holders will have the authority to decide whether to mint additional tokens for purposes of increasing emissions or expanding to other chains. Any minting beyond the 47 million supply will require a governance voting process and will be subject to a 72-hour timelock, ensuring transparency and community consensus in decision-making.

Protocol Regulation

KUSv3 of KuSwap v3 has three tokens available to regulate the system.

  • oKUSv3 — Reward token for LPs. Can be redeemed any time @ a discount on market price of KUSv3 via redemption.

  • KUSv3 — ERC-20 liquid token with max supply.

  • veKUS — ERC-721 governance token in the form of an NFT (non-fungible token). Votes to direct emissions, earns fees, bribes & oKUSv3 redemption funds + redemption fees.

oKUSv3 is used for rewarding liquidity providers through emissions. Its option mechanism provides sustainable funding for the protocol and support for the KUSv3 market. An in-depth explanation of all redemption options is here oKUS

veKUS is used for governance. Any KUSv3 holder can vote-escrow their tokens and receive veKUS (also known as a veNFT) in exchange. Additional tokens can be added to the veKUS NFT at any time.

The lock period (also known as vote-escrowed period, hence the ve prefix) can be up to 1 years, following the linear relationship shown below:

  • 100 KUSv3 locked for 1 year will become 100 veKUS

  • 100 KUSv3 locked for 3 months will become 25 veKUS

The longer the vesting time, the higher the voting power (voting weight) and rewards the veKUS holder receives.

ve(3,3) Mechanics

KuSwap v3 mechanics reflect a combination of two DeFi concepts:

  • Vote-Escrow — first introduced by Curve to strengthen incentives for long-term token holders

  • Staking/Rebasing/Bonding or (3,3) game theory — designed by Olympus DAO

Combined, the ve(3,3) mechanism rewards behaviors correlated with KuSwap v3's success, such as liquidity provision and long-term token holding. Liquidity providers receive KUSv3 emissions, and veKUS holders receive protocol fees, bribes, rebases, and governance power.

Gauge Voting

veKUS holders decide which liquidity pools receive emissions in a given epoch by voting on their preferred liquidity pool gauges. KUSv3 emissions will be distributed proportionally to the total votes a liquidity pool receives.

In return, voters receive 100% of the trading fees and bribes collected through the liquidity pool they vote for.

More information on voting can be found here

veKUS Voting

*These figures reflect the approved proposal as it appears on the medium article and snapshot voting. However, due to unforeseen delays, the timeline of the migration was moved and the actual circulating supply at the time the farms were stopped was 34,451,261 KUS. Hence, the initial supply was increased by 2,451,261 KUS in order to make sure to have enough supply for the migrators.

PreviousBribesNextoKUS

Last updated