TKN is a core element of Monolith’s offering. In this post we’ll cover the basics of our tokenomics in two sections:
🏦 The “Community Chest”
🔥 TKN Burn
Before jumping into the intricacies of TKN, we’d recommend you give the 7-steps to living bankless article a quick read. Though we’ll briefly outline our top-up mechanism below, you’ll find the article gives a comprehensive overview of our product and could get ahead of many of your usage questions.
🏦 The TKN Community Chest
The Community Chest is a smart contract where 1% commission is directed when a user tops up their Monolith card with any token other than TKN.
Here’s an example of what happens under the hood when a user selects 1 ETH to be converted to fiat and loaded to their debit card:
- 💳 1.00 ETH is sold on at market-rate to credit the user’s debit card account.
- 🗝 ️The 1% community contribution (0.01 ETH) charged is directly sent to our Community Chest. The community contribution is lifted when the user tops up using the TKN token.
- 🔮 A 1% Licence Fee (0.0101 ETH) is charged and paid to Monolith. The licence fee is lifted on stablecoins (such as DAI, USDC, or USDT).
Being transparent about our pricing is critical to us — check out all our fees here.
🔥 The TKN Burn mechanism
TKN holders can burn their tokens in exchange for a pro-rata amount of the tokens stored in the Community Chest smart contract.
Burning destroys TKN. As TKN is burnt, the remaining TKN will correspond to a higher pro-rata burn ration than before.
♨️ TKN Burn example
Let's illustrate the mechanism behind this using a hypothetical and simplified situation based on three assumptions:
- There is a total of 10000 TKN in circulation
- The TKN Community Chest contains 100 ETH & 1000 DAI
- A user owning 500 TKN decides to burn them
First, we need to calculate the percentage of the total TKN supply owned by the user burning their tokens —their pro-rata percentage of what’s stored in the TKN Community Chest:
Pro-Rata Percentage = Amount of TKN Owned / Total Supply of TKN
⇒ 500 / 10000 = 5%
By burning 500 TKN, our hypothetical user will claim 5 % of assets contained in the TKN Community Chest, which corresponds to:
⇒ 5% of 100 ETH → 5 ETH + 5% of 1000 DAI → 50 DAI
A subsequent 500 TKN burn following the first will return a higher pro-rata percentage since the total supply is now down to 9500:
⇒ 500 / 9500 = 5.263%
📜 The Community Chest contract
The TKN Community Chest (Asset Contract) is now live, meaning contributions sent from users with the latest versions of the contract wallet (v2.2.0 & upwards) are now automatically collected.
What makes the Community Chest so special? It’s a smart contract system, it will ultimately operate in an open and transparent manner
You don’t need to use the Monolith app to burn your TKN. You can simply call the function using the service of your choice.
We are currently migrating users who deployed their Contract Wallet before the new version was live (v1.x -> v3.2.0), so they can contribute to the Community Chest. We will then, seed the Community Chest with the contributions collected prior to it going live.
📘 How to burn your TKN
Go to the TKN Token Contract — Write Page. There, you can call the 9th function, burn.
It just needs one parameter:
_amount (uint256): the amount of TKN to burn. The input on Etherscan is in Wei, so it may prove easier to use a tool like Ethereum Unit Converter to convert to a unit you're familiar with such as Ether/TKN.
To burn your TKN held in your Monolith wallet, you'll need to import it into Metamask.
This article does not constitute an offer to sell, a solicitation of an offer to buy, or a recommendation of any cryptocurrency, digital token, investment, security or any other product or service.
Furthermore, nothing in this article is intended to provide legal or investment advice and nothing in this article should be construed as a recommendation to buy, sell, or hold any cryptocurrency, digital token, investment or security, or to engage in any investment strategy or financial transaction.