How Kyokai impacts KAI token?

As KardiaChain evolves into KyoKai, our KAI token becomes more than just a tool to secure our blockchain network and a means to pay for computational resources.

1. Introducing the expansion of KAI tokenomic

Before Kyokai, there were three main players in the network:

1. Validators: secure KardiaChain for rewards and run computations for fees.
2. Holders: stake KAI to validators for a share of rewards and fees.
3. Users: delegate Validators with KAI as they use KardiaChain to store and/or compute.

Businesses often join as users because they want to bring their products and services to blockchain, or as we usually say, they “blockchainise/blockchainize” it. However, there are challenges for businesses, which are also the main obstacles that create hesitation for businesses to implement blockchain in their operations:

1. Justifying token purchase in their book, accounting-wise. At the time of this announcement, tokens have yet to be acknowledged as assets as per traditional sense.
2. Educating their customers about blockchain fees in all interactions regarding blockchain. Minimal fees paid by token can be a minor annoyance for non-blockchain customers.
3. Subsidising every customer with KAI. Most customers will prefer full-on traditional benefits working with a business, so businesses subsidising them with KAI, or some percentage in KAI, can cause dissatisfaction, despite this practice being a good way of introducing the mass to KAI.

With the (upcoming) KyoKai hard fork for our infrastructure, we reintroduce businesses as a new player class in our blockchain network:

4. Businesses: tokenize their products and services, and pay fees to Validators for their own operation, including their customers’ usage. Businesses can also choose to become a Validator to minimise fees.

*Note: Businesses operate on revenue without the incentive of block rewards.

This will bring about changes to other classes:

• Validators now have the option to collaborate with businesses instead of running their own nodes.
• Holders now have a new staking option without the risk of being slashed, in exchange for perks in businesses of choice (profit sharing or a percentage of their company, etc.)
• Users now have the option to enjoy gasless activities when using products and services from these businesses.

Together with the new business class, we introduce two new mechanisms to support the function of this player class and facilitate all actions toward the main goal of bringing value to society.

2. A new burn mechanism

To ensure the value of our ecosystem flows back to Kardiachain, we devise a burn-as-you-use (BAYU) mechanism for our key business operations. We have laid out the four pillars of the phygital society: People, Items, Locations, and Activities; conveniently shortened as PILA. Thus, we created four business units respectively for PILA and the fifth unit for sidechains.

Each unit uses a share of its own revenue to buy and burn KAI quarterly. The share is proportional to its usage of KardiaChain computational and/or human resources. The approach to quantify such usage is based on either number of transactions or number of tokens issued.

Example 1:

A city sidechain processes a t number of transactions per day will translate into k1 KAI burnt daily with the below formula:

*Note: Cost per transaction varies by city depending on exact business agreements.

Example 2:

A fashion house (related to Items unit) produces a p number of phygital apparels per month which translates into k2 KAI burnt monthly with the below formula:

P: market price of KAI at the time

*Note: Cost per item is fixed, and lower if p goes higher while maintaining an increase in the product.

3. Proof of Stake is dead, long live Proof of Stake!

As we require our units to BAYU, it is natural that our units and partners will find optimal ways to obtain KAI, aside from buying from the market. We provide a new staking mechanism for these businesses to exchange perks or even company shares for block rewards. The mechanism is as follows:

• Each business can set up a node to receive staking from delegators.
• The commission is set to 100%, meaning the business receives all block rewards.
• They will have their rules and criteria for distributing perks and/or shares.
• There are two main metrics to consider: 1) Threshold of total stake value, and 2) Minimum staking time.

For example, a business can provide 3 tiers of perks:

• Tier 1 for a minimum stake of 10,000 KAI to receive a discount voucher monthly
• Tier 2 for a minimum stake of 50,000 KAI to receive a free product of choice monthly
• Tier 4 for a minimum stake of 500,000 KAI to receive a profit share quarterly

Again, why do businesses provide perks and share company’s percentage to KAI stakers? The short answer is to gain support from Kyokai via BAYU and gather tokens to subsidise their customers’ on-chain activities. Kyokai is a cutting-edge technology that provides major advantages for those who apply it the right way. Our team provides not only technical support, but also the unique know-how from working between the boundaries of the traditional and blockchain world. Partners are happy to share the success (in many ways) with Kyokai, and we are happy to pay forward and share with KAI holders.

4. End note

In summary, the evolution of KardiaChain into KyoKai has revolutionized its tokenomics, involving businesses as active participants. Through mechanisms like burn-as-you-use and staking, KyoKai ensures value circulation and offers benefits to validators, holders, and users. By tokenizing products and services, businesses can leverage KyoKai’s technology, while users enjoy gasless activities. KyoKai’s commitment to sustainability and partnerships fosters a collaborative ecosystem. As KyoKai advances, we can expect further innovations driving blockchain adoption.

All these changes will be implemented in the Kyokai hard fork, along with the first burn event in Q3/2023.

Disclaimer: The information provided is for informational purposes only and not financial advice. Conduct your own research and consult professionals before making investment decisions.