Tokenomics

Kopi comes with its own utility token $XKP. That token is used for staking, governance votes, gas fees and will be minted and burned to manage the supply of the protocol's algorithmic stablecoins, primarily its dollar-stablecoin $kUSD.

100,000,000 $XKP were minted on chain creation and the supply is expected to increase slowly through inflation (ignoring deflationary mechanisms).

Deflationary Mechanisms

Whenever the protocol mints new $kUSD, it sells them in favour of $XKP and then burns $XKP. The more $kUSD will be put into supply, the more deflationary $XKP will become. When $kUSD is sold and its price is falling, the protocol has to re-mint $XKP to buy back $kUSD. However, the protocol burns whenever it receives it as fee income from sources like Automation features or trading fees, thereby directly lowering the supply of $kUSD and indirectly keeping $XKP deflationary.

Passive staking & liquidity rewards

$XKP stakers receive passive rewards coming from two sources. The first one is 7% from yearly inflation, the second income is coming from trading fees from all trades on our DEX. Providing liquidity in XKP also attracts fees from all trades on the DEX and from other DeFi activities that are being built on Kopi, which will add further utility to it.

Distribution

Kopi was created with 100,000,000 $XKP. All funds, except the initial liquidity, are vested for 18 months. The distribution is as follows:

• 50% liquidity added to the DEX

• 15% Team

• 15% Early investors *subject to change to the downside and opens up options for some great incentives

• 10% Kopi Foundation, used to stake with validators to secure the network at this early stage and deposits into the ecosystem

• 5% Rewards and marketing (1% has gone to Testnet participants and an ongoing airdrop campaign has recently started. These are vested for 3 months)

• 5% Development cost, infrastructure and similar

Inflation

The chain's inflation parameters are the following:

{
  "mint_denom":            "ukopi",
  "inflation_rate_change": "0.50000000000000000",
  "inflation_max":         "0.070000000000000000",
  "inflation_min":         "0.040000000000000000",
  "goal_bonded":           "0.600000000000000000",
  "blocks_per_year":       "31536000"
}