KILT Token Economy: An Update

UPDATE, 19 August 2021:
We have made two updates to the Token Metrics document, originally published on 11 August 2021:

• Page 1: Initial circulating supply: 34 million (revised from 32.5 million)
• Page 2: Composition of crowdloan reserve is now divided between the two categories “Unvested and unlocked” and “Vested linearly over 6 months”.

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It’s exciting times for KILT as we get closer to crowdloan and mainnet launch on KILT’s continuous path to decentralisation. In addition to building and auditing our technology, we have been fine-tuning our token economy in order to incentivise functionalities in the network, while simultaneously aiming to avoid the pitfalls of high inflation.

We are delighted to present our updated token metrics to you, the KILT community. These tokenomics are revised from KILT’s initial framework.

The KILT Coin is critical to operating KILT; it is needed to perform credential verification transactions on KILT’s blockchain and also powers governance. There will be a limited supply of KILT Coins that are gradually introduced into the system over time.

Key Metrics

• Total supply at Token Generation Event (TGE): 150 million pre-minted KILT Coins.
• Initial circulating supply: 32.5 million.
• The remaining pre-minted coins will be gradually unlocked over a period of 6 to 60 months.
• Initial inflation will be around 5% per annum, dropping to 1% per annum within the first 6 years and then slowly moving towards 0%.
• There would be only one KILT network and one KILT Coin, regardless of whether KILT moves from Kusama to a Polkadot parachain, as determined by community governance.

And it’s important to remember that KILT’s parachain will launch with significant activated functionality — staking for collators and delegators, and the initial token economy outlined in our tokenomics document. This means the first phase of staking will be possible on KILT from genesis.

Migration of KILT From Kusama to Polkadot Parachain

The tokenomics is designed to reward the KILT Treasury with 10 million KILT Coins linearly over the first five years. In the future, governance may decide to exchange these accumulated KILT Coins for DOT and use them to bid for a Polkadot parachain slot.

If KILT moves from Kusama to Polkadot, we assume that governance would transfer the existing KILT Coins without changing the balances or owners of these KILT Coins, and without changing the metrics and economics.

We hope the community finds this tokenomics update useful. By carefully designing the framework for the KILT system, we aim to enable a new economy around the KILT Coin.

Finally, we want to thank our builders and partners for supporting KILT’s mission of restoring digital identity and dignity to the individual.