2.6 KiB
How It Works
The Basics
KRK tokens trade on Uniswap (Base network). Behind the scenes, a trading vault holds ETH that backs every KRK token. This creates a floor price — the absolute minimum value your tokens are worth.
Earning by Staking
When you stake KRK tokens, you claim owner slots — a percentage of the protocol's staking pool. Every time someone buys KRK on the open market, new tokens are minted, and stakers get a proportional share. The more slots you hold, the more you earn.
Choosing Your Rate
When you stake, you pick an earning rate (called a "tax rate" in the contracts). This is the yearly cost of holding your position:
| Rate Level | Yearly Cost | Trade-off |
|---|---|---|
| Low (1-5%) | Cheap to hold | Easy for others to challenge |
| Medium (12-30%) | Moderate cost | Balanced protection |
| High (50%+) | Expensive to hold | Very hard to challenge |
The key insight: Your earning rate is also your protection level. A higher rate costs more, but makes it harder for anyone to take your position.
Challenges (Snatching)
If someone wants your staking slots and is willing to pay a higher rate than you, they can challenge (snatch) your position:
- The challenger stakes at a higher rate
- Your position is automatically closed
- You receive the full market value of your staked tokens — including any earnings
- The challenger takes over your slots
You never lose money in a challenge. You get compensated at current market value. You just stop earning from those slots.
The Trading Vault
The Liquidity Manager automatically manages the ETH/KRK trading pool:
- When staking activity is high (bullish signal), it concentrates liquidity for better trading
- When activity drops, it spreads liquidity wider for stability
- It tracks a volume-weighted average price (VWAP) to set the range
This happens automatically — no human decisions, no hidden operators. The rules are in the smart contract.
Floor Price
Every KRK token is backed by ETH in the vault. The floor price is calculated as:
floor = ETH in vault ÷ total KRK supply
Your tokens can never be worth less than the floor. When someone buys KRK, more ETH enters the vault. When someone sells, ETH leaves. The system maintains balance.
Summary
- Buy KRK on Uniswap (Base)
- Stake to earn from every trade
- Choose your rate — higher = more protection, higher cost
- Earn passively as the protocol generates trading activity
- If challenged, you get paid out at market value