# PRODUCT-TRUTH.md — What We Can and Cannot Claim

This file is the source of truth for all product messaging, docs, and marketing.
If a claim isn't here or contradicts what's here, it's wrong. Update this file
when the protocol changes — not the marketing copy.

**Last updated:** 2026-02-22
**Updated by:** Johann + Clawy after user test review session

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## Target Audience

- **Crypto natives** who know DeFi but don't know KrAIken
- NOT beginners. NOT "new to DeFi" users.
- Think: people who've used Uniswap, understand liquidity, know what a floor price means

## The Floor

✅ **Can say:**
- Every KRK token has a minimum redemption price backed by real ETH
- The floor is enforced by immutable smart contracts
- The floor is backed by actual ETH reserves, not promises
- No rug pulls — liquidity is locked in contracts
- "Programmatic guarantee" (borrowed from Baseline — accurate for us too)

❌ **Cannot say:**
- "The floor can never decrease" — **FALSE.** Selling withdraws ETH from reserves. The floor CAN decrease.
- "Guaranteed profit" or "risk-free" — staking is leveraged exposure, it has real downside
- "Floor always goes up" — only true if fee income exceeds sell pressure, which isn't guaranteed

## The Optimizer

✅ **Can say:**
- Reads staker sentiment (% staked, average tax rate) to calculate parameters
- Returns 4 parameters: capitalInefficiency, anchorShare, anchorWidth, discoveryDepth
- Runs autonomously on-chain — no human triggers needed for parameter reads
- Is a UUPS upgradeable proxy — can be upgraded to new versions
- Currently admin-upgradeable (single admin key set at initialization)
- Multiple versions exist: Optimizer, OptimizerV2, OptimizerV3, OptimizerV3Push3
- "The optimizer evolves" — true in the sense that new versions get deployed

❌ **Cannot say:**
- "No admin keys" — **FALSE.** UUPS upgrade requires admin. Admin key exists.
- "No proxy patterns" — **FALSE.** It IS a UUPS proxy.
- "Stakers vote for new optimizers" — **NOT YET.** This is roadmap, not current state.
- "Simply evolves" / "evolves without upgrades" — misleading. It's an explicit upgrade via proxy.
- "Three strategies" — **FALSE.** It's ONE strategy with THREE positions (Floor, Anchor, Discovery).
- "AI learns from the market" — overstated. The optimizer reads staking sentiment, not market data directly.

🔮 **Roadmap (can say "planned" / "coming"):**
- Staker governance for optimizer upgrades (vote with stake weight)
- On-chain training data → new optimizer contracts via Push3 transpiler
- Remove admin key in favor of staker voting

## Liquidity Positions

✅ **Can say:**
- Three positions: Floor, Anchor, Discovery
- Floor: deep liquidity at VWAP-adjusted prices (safety net)
- Anchor: near current price, fast price discovery (1-100% width)
- Discovery: borders anchor, captures fees (wide range, ~3x current price)
- The optimizer adjusts position parameters based on sentiment
- "Recenter" = atomic repositioning of all liquidity in one transaction
- Anyone can trigger a recenter; the protocol bot does it automatically
- Bull mode: wider discovery, aggressive fee capture. Bear mode: tight around floor.

❌ **Cannot say:**
- "Three trading strategies" — it's three positions in ONE strategy
- "Token-owned liquidity" — ⚠️ USE CAREFULLY. KRK doesn't "own" anything in the legal/contract sense. The LiquidityManager manages positions. Acceptable as metaphor in marketing, not in technical docs.

## Staking

✅ **Can say:**
- Staking = leveraged directional exposure
- Stakers set tax rates; positions can be "snatched" by others willing to pay higher tax
- Tax rates influence optimizer sentiment → bull/bear positioning
- "Stakers profit when the community grows" (via supply expansion + leverage)
- Staking is optional — most holders just hold

❌ **Cannot say:**
- "Start Earning" / "Earn yield" / "APY" — staking is NOT yield farming
- "Guaranteed returns" — leveraged positions amplify losses too
- "Passive income" — tax payments are a cost, not income

## Supply Mechanics

✅ **Can say:**
- Elastic supply: buy = mint, sell = burn
- Protocol controls minting exclusively through LiquidityManager
- LiquidityManager address is set once on Kraiken contract and cannot be changed

## Code / Open Source

✅ **Can say:**
- Smart contracts are verifiable on Basescan
- Key contracts are viewable on the docs/code page
- "Full source will be published at mainnet launch" (if that's the plan)

❌ **Cannot say:**
- "Open source" — the Codeberg repo is **private**. This is currently false.
- "Audited" — unless an audit has been completed

## General Rules

1. When in doubt, understate. "The floor is backed by ETH" > "The floor guarantees you'll never lose money"
2. Separate current state from roadmap. Always.
3. Technical docs: be precise. Marketing: metaphors OK but never contradict technical reality.
4. If you're not sure a claim is true, check this file. If it's not here, verify against contract source before writing it.