61 lines
2 KiB
Markdown
61 lines
2 KiB
Markdown
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# Tokenomics
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## KRK Token
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- **Standard**: ERC20 on Base (Ethereum L2)
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- **Supply**: Dynamic (minted on buys, burned on sells)
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- **Backing**: Every KRK token is backed by ETH in the trading vault
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## ETH Reserve & Floor Price
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The protocol maintains an ETH reserve in a Uniswap V3 concentrated liquidity position. This creates a floor price:
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```
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floor_price = ETH_reserve / total_KRK_supply
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```
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**Key property**: The floor price can only go up (in ETH terms) because:
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- Buys add ETH to the reserve and mint KRK at market price (above floor)
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- Sells remove KRK from supply and return ETH at market price
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- Trading fees from the pool add to the reserve without minting new tokens
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## Supply Mechanics
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### Minting (on buy)
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When someone buys KRK on Uniswap:
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1. ETH enters the pool
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2. KRK is minted at market price
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3. 20% of new tokens go to the staking pool (for stakers)
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4. 80% goes to the buyer
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### Burning (on sell)
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When someone sells KRK:
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1. KRK is burned
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2. ETH leaves the pool at market price
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3. The staking pool burns proportionally
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## Liquidity Management
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The LiquidityManager positions liquidity in a concentrated range around the current price:
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### Modes
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- **Scarcity** (bearish signal): Wide range, conservative positioning
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- **Abundance** (bullish signal): Narrow range, aggressive fee capture
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### Signals
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The optimizer reads staking activity as a sentiment indicator:
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- High staking ratio + low tax rates = genuine confidence → Bull mode
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- Dropping staking or rising tax rates = uncertainty → Bear mode
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### VWAP Tracking
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The system tracks a volume-weighted average price (VWAP) to set liquidity ranges. This creates a "mirror floor" — a second price support level based on recent trading history.
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## Fee Generation
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Trading activity generates fees from the Uniswap V3 position. These fees accrue to the ETH reserve, increasing the floor price for all holders.
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The fee rate depends on:
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- Trading volume
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- Liquidity concentration (narrower range = more fees per trade)
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- Pool fee tier (1% on the KRK/WETH pair)
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