KIP-4: KWENTA Tokenomics
Summary
A proposal outlining the purpose, function, and distribution for the Kwenta protocol token.
Abstract
The Kwenta token will be used to incentivize coordination and growth within the Kwenta DAO. The token will have two primary functions:
Staking – Community members who stake Kwenta will receive inflationary rewards. Inflationary rewards are intended to favour those who use the product most as well as those that contribute to the DAO. This mechanism will also offer the infrastructure needed for the DAO to become financially sustainable.
Governance – Community members that stake their Kwenta token will gain voting power within the protocol. At launch, voting power will be determined solely by the amount of tokens a user has staked. Ex. A user holding 1.72 Kwenta tokens would have 1.72 worth of voting power. The intended outcome of enabling community members to vote with their token is to decentralize the decision making process of the DAO.
Motivation
The Kwenta DAO requires a token to coordinate governance in a decentralized manner. Additionally, the token will be used to incentivize targeted behaviour within the DAO. DAO operators and product users require incentive alignment to see the protocol be successful and token is an effective way to achieve this. The goal with this model is to reward members that provide long-term value to the protocol.
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