Tokenomics

KRK Token

Standard: ERC20 on Base (Ethereum L2)
Supply: Dynamic (minted on buys, burned on sells)
Backing: Every KRK token is backed by ETH in the trading vault

ETH Reserve & Floor Price

The protocol maintains an ETH reserve in a Uniswap V3 concentrated liquidity position. This creates a floor price:

floor_price = ETH_reserve / total_KRK_supply

Key property: The floor price can only go up (in ETH terms) because:

Buys add ETH to the reserve and mint KRK at market price (above floor)
Sells remove KRK from supply and return ETH at market price
Trading fees from the pool add to the reserve without minting new tokens

Supply Mechanics

Minting (on buy)

When someone buys KRK on Uniswap:

ETH enters the pool
KRK is minted at market price
20% of new tokens go to the staking pool (for stakers)
80% goes to the buyer

Burning (on sell)

When someone sells KRK:

KRK is burned
ETH leaves the pool at market price
The staking pool burns proportionally

Liquidity Management

The LiquidityManager positions liquidity in a concentrated range around the current price:

Modes

Scarcity (bearish signal): Wide range, conservative positioning
Abundance (bullish signal): Narrow range, aggressive fee capture

Signals

The optimizer reads staking activity as a sentiment indicator:

High staking ratio + low tax rates = genuine confidence → Bull mode
Dropping staking or rising tax rates = uncertainty → Bear mode

VWAP Tracking

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.

Fee Generation

Trading activity generates fees from the Uniswap V3 position. These fees accrue to the ETH reserve, increasing the floor price for all holders.

The fee rate depends on:

Trading volume
Liquidity concentration (narrower range = more fees per trade)
Pool fee tier (1% on the KRK/WETH pair)

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