harb/docs/PRODUCT-TRUTH.md

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.