harb/HARBERG.md

# Harberger (Stage 1)

The foundation layer of the KRAIKEN protocol. A staking market balanced by the Harberger tax.

## Status: Complete

Stage 1 established the core mechanisms now used by Stage 2 (KRAIKEN):

- **Token**: KRAIKEN (KRK) — minted on buys from the LiquidityManager's Uniswap V3 positions, burned on sells
- **Staking**: Users stake tokens and declare a self-assessed tax rate. Stakers maintain percentage ownership of total supply as it grows.
- **Snatching**: Any position can be taken by someone willing to pay a higher tax rate, creating a competitive prediction market for token value
- **Tax collection**: Automated by the transaction bot (`services/txnBot/`)

## Evolution

Stage 1's static liquidity strategy evolved into Stage 2's three-position dynamic strategy with OptimizerV3. The Harberger staking mechanism now serves as the sentiment oracle driving optimizer parameter selection. See [TECHNICAL_APPENDIX.md](TECHNICAL_APPENDIX.md) for details.