# Tokenomics

Last updated

Last updated

KLAP Tokenomics

KLAP has a maximum total supply of 1,000,000,000 (1 billion) tokens.

However, if the burn and redeem mechanism is to be voted in by the community, the maximum total supply will likely be significantly less than that.

The breakdown of the token distribution is as follows:

**25% given out as rewards for using the protocol (lending/borrowing) - Emission formulas below**This will be released via a geometric decay function. The first "epoch" of 2 weeks will release 2.5% of the total supply. Each epoch, the emission will decrease by 10%.

**10% to Pool 2 (KLAP/KLAY) - Emission formulas below**Geometric decay function. First epoch 1%, each epoch decreases emissions by 10%.

**15% to Ve stakers - Variable unlock, based on emission formulas below**Released based on lock time and supply being locked. Formulas below.

**5% for Early Incentives - Unlocked at launch excluding Liquidity Drop**Early Incentives include rewards for pre-mining and potentially a lockdrop to distribute the KLAP token at launch.

**9% Treasury - Unlocked via community votes (KLAP holders)**Controlled by the protocol DAO in the future - initially, some of the treasury KLAP will be used for protocol owned KLAP/KLAY liquidity to seed the pool.

**1% Community - Variable unlock**Token rewards for early community members and small events to reward loyal Klappers

**10% Krust/Klaytn**- 6 month cliff, 24 months linear unlockThe protocol will receive KLAY investment, which will be used as liquidity rewards to further incentivize lending/borrowing and Pool 2.

**12.5% Devs**- 6 month cliff, 24 months linear unlock**7.5% Investors**- 6 month cliff, 24 months linear unlock**5% Advisors**- 6 month cliff, 24 months linear unlockFor bridges, liquidity partnerships, etc

Emission Formulas

Where t = epoch, and 1 epoch = 2 weeks

Therefore, E(0) = emissions for first 2 weeks = 25,000,000 KLAP

Where t = epoch, and 1 epoch = 2 weeks

Therefore, E(0) = emissions for first 2 weeks = 10,000,000 KLAP

The formula for Ve is not dependent on time. Instead, it is based on lock duration and, amount being locked, and how many tokens are remaining in the Ve reward pool.

With the following formulas, Ve stakers are guaranteed a specific amount of KLAP as their Ve rewards when they lock in, without having to worry about dilution.

If tokens remaining in reward pool is greater than 8% of the supply:

Where:

R(a,d) is the number of KLAP that the user will receive

a = amount of KLAP being staked

d = duration that the KLAP will be locked for

D = Maximum duration that KLAP can be locked for. This is a constant at 2 years.

Note that d/D is squared in order to attribute the importance of longer lock times in the early days of the protocol. The constant "3" is used to intentionally boost the rewards for this period.

2. If tokens remaining in reward pool is less than 8% of the supply:

Where:

R(a,d,r) is the number of KLAP that the user will receive

a = amount of KLAP being staked

d = duration that the KLAP will be locked for

D = Maximum duration that KLAP can be locked for. This is a constant at 2 years. Since D is greater or equal to d, the final multiplier is less than or equal to 1.

S = The circulating supply of KLAP. Since S + a is greater or equal to a, the first multiplier is less than or equal to 1.

r = remaining rewards for the Ve rewards pool

Note that since all multipliers outside of r in the above formula are less than or equal to 1, the Ve reward pool will always have enough KLAP to pay out rewards.

It continues to incentivize people to lock earlier than later, and lock for longer. However, the lock duration has a slightly lower emphasis at this point (d/D is no longer squared).

$E(t) = 25,000,000 * (0.9)^t$

$E(t) = 10,000,000 * (0.9)^t$

$R(a,d) = a * (d/D)^2*3$

$R(a,d,r) = \frac{a}{S}*r*(\frac{d}{D})^{1.5}$