Medium Link : https://medium.com/@kroma-network/understanding-kromas-zero-start-tokenomics-a-comprehensive-guide-494fdd72164eDisclaimer: This article explores the tokenomics of the Kroma and is provided only for informational purposes. It’s important to note that we are the creators of Kroma and have a vested interest in its success. Please be aware that this article does not constitute financial or investment advice, and readers are encouraged to conduct independent research and seek professional advice before making any decisions related to Kroma. Additionally, readers should recognize the cryptocurrency market’s volatility, understand that Kroma evolves, and be responsible for compliance with applicable regulations. We disclaim any liability for losses arising from the use or reliance on the information in this article.TL;DRKroma’s tokenomics is designed to correlate Network growth with the value of its native token KRO. This includes mechanisms for zero-start distribution, controlled inflation, and Network growth alignment, with dynamic adjustments to KRO issuance based on Network activity.Kroma allocates 38% of the total KRO supply to the Ecosystem Fund, supporting various stages of development, marketing, security, community engagement, and ecosystem building. Other allocations include Community Airdrop, and incentives for the WEMIX Community.Kroma’s minting logic dynamically adjusts the number of KRO created per block, responding to Network activity. Specific parameters, including hard caps for mint increase and decrease, ensure a balanced response to varying Network conditions, supporting both the growth and stability of the KRO price.The Community Impact Fund and Partner Fund within Kroma foster innovation and growth by providing grants and support to early-stage dApps and large-scale projects. The process involves clear cycles of selection, incentivization, voting, and reflection, involving KRO Stakers in decision-making.Network fees are strategically redistributed to Transaction Contributors and KRO Stakers, fostering development and creating investment opportunities. The model includes supplementary rewards and voting rights, crafting targeted incentives that align the interests of builders, stakers, and users, ensuring a robust and sustainable ecosystem.IntroductionKroma’s primary concept revolves around aligning Network growth with the value of its native token, KRO. This structure aims to establish a strong correlation between Network value and KRO value, overcoming the limitations of traditional Layer 2 tokenomics. The approach ensures a clear connection between Network growth and token value appreciation.The foundational principles that guide Kroma’s tokenomics are articulated through a strategic alignment of Network growth, zero-start distribution, and controlled inflation, each contributing to a robust and transparent financial ecosystem.Network Growth Alignment: The growth of the Network is directly tied to the value of KRO, with mechanisms to adjust KRO issuance based on Network activity, more specifically, the amount of gas used within a block.Zero-Start Distribution: No Presale or Pre-Mining, ensuring that all participants are rewarded for their contributions.Inflation Control: The Sliding Model is applied to continuously reduce annual inflation$KRO Allocation at a GlanceBelow figure shows the overall allocation of $KRO tokens.Ecosystem Fund (38%): The Ecosystem Fund is a proactive program meant to accelerate development and growth. The fund will provide grants to projects in all stages and utilize funds for marketing purposes.Community Airdrop (7%): Reward users and dApps for contributing ecosystem growth.WEMIX Community (10%): Allocations for the WEMIX community are designed to be in alignment with the co-growth of the Kroma and WEMIX ecosystems. The WEMIX Community boasts a user base of 9 million users and a highly engaged user pool, particularly in gaming. Kroma recognizes the significant value held by this WEMIX Community, considering it a core group to engage in collaboration with. As part of this collaboration, Kroma will be dedicated to supporting the WEMIX community by providing rewards and offering incentives to users across both chains.Core Team (15%): The core team who’ve been working tirelessly to bring Kroma Network to the masses.WEMIX Foundation (15%): WEMIX Foundation is the biggest supporter and core contributor of Kroma, planning to sequentially support their various Web3-based games, DeFi, NFT, and more within the Kroma ecosystem. Moving forward, we intend to continue collaborating to ensure the mutual growth of these two ecosystems.Investors (15%): Initial financial and strategic investors that help the ecosystem grow faster at the initial stage.More details are explained in the following sections.Ecosystem FundThe Ecosystem Fund is designed to foster development and growth within the Kroma Network. 30% of the total KRO supply is allocated to the Ecosystem Fund. Kroma will use this allocation to support projects at various stages and to fund marketing initiatives. This fund is divided into four main categories:Security Contributor Fund (5%)Community Impact Fund (13%)Partner Fund (7%)Utility Fund (13%)Security Contributor FundAn allocation of 5% will be dedicated to the Security Contributor Fund. Kroma will use these funds to incentivize the entities that help secure the chain. Activities that secure the chain include but are not limited to submitting checkpoint outputs, mediating disputes for asserters and challengers, and submitting validity proofs in the ZKR phase.The Security Council plays a crucial role in Kroma’s upgrades and addressing any potential issues that may arise in dispute challenges, determining them through multi-signature agreements. Rewards for Security Council are also included in the Security Contributor Fund.Community Impact FundThe Community Impact Fund will be utilized to provide grants to early-stage dApps, with decisions made through the votes of KRO Stakers, who are entities that stake KRO to obtain Network fee rewards. The execution of the fund is managed in cycles, each lasting 2 months, and follows a specific sequence.The cycle begins with the Selection Period of 4 weeks, during which applications from dApps wishing to receive grants are received and reviewed. The grant size is determined based on the number of selected dApps and the scale of the ecosystem at that time, with the Kroma Foundation directly performing the selection of early-stage dApps.Following the Selection Period is the 2-week Bribing Period, where dApps that have passed the initial stage prepare rewards to rent voting rights from KRO Stakers. dApps will give out incentives in the process of renting voting rights, which can be seen as an additional incentive for KRO Stakers.After the Bribing Period, a Voting Period of 1 week follows, where the actual voting takes place. Finally, the cycle ends with the Reflection Period of 2 weeks, a time to reflect on the previous cycle and incorporate community feedback. During this period, grants are distributed linearly, with a 2-week vesting term and no cliffs.In summary, the Community Impact Fund represents a dynamic and transparent mechanism within Kroma, fostering innovation and growth. Through a carefully orchestrated cycle of selection, incentivization, voting, and reflection, Kroma will empower early-stage dApps by providing them with the necessary grants and support. By involving KRO Stakers in the decision-making process and maintaining a clear and accountable structure, the Community Fund ensures that the Kroma ecosystem thrives, guided by the collective wisdom and investment of its community. Also, as long as a dApps follows procedures, it can be selected for grants consecutively, with no maximum limit.Partner FundThe Partner Fund is allocated for partnerships with Large-Scale dApps, referring to projects that have already found product market fit and are looking to expand to Kroma Network. Unlike the Community Fund, the selection of dApps for the Partner Fund is made directly by the foundation without undergoing a separate community voting process. Moreover, the term of the grant is subject to a vesting period that includes cliffs. This structure ensures a committed partnership and aligns the interests of both parties over a longer term.Utility FundThe Utility Fund is dedicated to building the Kroma ecosystem, utilizing the necessary resources for Marketing, Bug Bounty, Liquidity Provisioning (Market Making), and other essential functions. All utilized resources will be transparently disclosed, reflecting the commitment to openness and accountability of the foundation to the Kroma community.Community AirdropAn allocation of 7% of the total KRO supply will be dedicated to the community. Due to the nature of airdrops, the Kroma core team, in collaboration with professional third parties, will be responsible for determining airdrop metrics as fairly as possible.The first Airdrop, which will take place at the Token Generation Event (TGE), will distribute around 8% of the total Airdrop amount. The airdrop will target addresses that have:Actively contributed as a builderActively contributed as an userActively contributed as a community memberAll transactions generated from the mainnet, including those generated before the TGE, will be considered.WEMIX CommunityKroma is committed to symbiotically growing alongside the WEMIX ecosystem, playing a crucial role in bridging WEMIX’s multifaceted gaming and DeFi ecosystems to Ethereum.In alignment with this vision, a total of 10% of KRO has been allocated to the WEMIX Community. The distribution of KRO will be conducted through various methods that are not limited to, but include:Swapping WEMIX for KRO at a favorable rateOffering KRO rewards for WEMIX stakersKRO airdrops for WEMIX stakers$KRO Minting LogicKroma’s minting logic dynamically adjusts the number of KRO created per block, responding to the sliding model and network activity.Default Mint Amount shaped by the Sliding ModelKRO will be minted per block with a decaying emissions schedule, more specifically a reduction factor of 7.88% per quarter.These are the fundamental parameters determining the default minting amount per block:KRO Total Supply (Soft Cap): 50,000,000Default Mint Amount: 1Reduction Factor: 7.88%Sliding Window in Days: 90The first sliding epoch will mint 1 KRO per block, and this number will drop to 0.151 KRO per block at the end of Year 6. Although KRO will be emitted perpetually, the KRO minted by the end of Year 6 would round up to around 86% of the total supply as shown in the following figure. Moreover, all who are entitled to earn KRO rewards will get their rewards according to the reward schedule, thus giving those who participate in an early phase a higher advantage of getting more KRO rewards.This structure significantly reduces the overhang risk compared to cases where a large volume is distributed to specific groups (e.g., investors) according to the vesting schedule. As a result, the likelihood of market disruption and other adverse effects is relatively low.Adjusted Mint Amount shaped by Network ActivityThe number of KRO created per block is dynamically adjusted within a certain range to maintain a correlation between the activation level of the Kroma Network and the issuance of KRO. If the Network is more active, generating more network fees, the issuance of KRO increases. Conversely, if the Network is less active, the issuance of KRO decreases.The parameters governing this process are as follows:Block Gas Limit: 30,000,000Block Gas Target (G_target): 5,000,000EIP-1559 Elasticity Multiplier: 6Max. Mint Increase (per block): 3%Max. Mint Decrease (per block): 7%Mint Increase Hard Cap: 10%Mint Decrease Hard Cap: 20%Mint Increase and Decrease per blockThe minting logic responds to Network congestion and fee collection, increasing KRO issuance when the Network is more active and decreasing it when less active.If the previous gas (G_prev) is greater than or equal to the gas target (G_target), the current reward increases by up to 3% per block, with a hard cap of 10%. If G_prev is less than G_target, the current reward decreases by up to 7% per block, with a hard cap of 20%. The consecutive occurrence of four blocks with specific gas conditions triggers the hard caps.Stabilization and ControlThe hard caps on mint increase and decrease ensure that the KRO price is stabilized by controlling the issuance according to Network needs.The Mint Increase Hard Cap is set at 10% to control the circulation of KRO by limiting the maximum amount of tokens minted per block. No matter how much gas is included in a block, the maximum amount of tokens minted per block is limited to Default Mint Amount * 1.1. If a block contains a large amount of gas, it means the Network is congested, and more fees are collected. By limiting the increase in KRO issuance to +10%, it is expected to have a positive effect on the KRO price, as more ETH is collected.On the other hand, the Mint Decrease Hard Cap is set at 20% to ensure that even if the amount of gas included in a block is minimal, the minimum amount of tokens minted per block is limited to Default Mint Amount * 0.8. If a block contains a small amount of gas, it indicates that the Network is not congested. By reducing the issuance of KRO by 20%, the minting logic adapts to the lesser amount of ETH collected, helping to defend against a price drop to a certain extent.The different values for the Mint Increase and Decrease Hard Caps in the KRO minting logic are deliberately designed to provide nuanced control over the KRO issuance. By setting these caps at 10% and 20%, respectively, the logic ensures a balanced response to varying Network conditions, supporting both the growth and stability of the KRO price. This approach reflects a thoughtful consideration of the Network’s dynamics and the broader economic factors influencing the Kroma ecosystem.Finishing off, the KRO minting logic is a sophisticated mechanism that aligns the issuance of KRO with the Network’s activity. By dynamically adjusting the minting rate based on specific parameters, it ensures a balanced and adaptive response to changes in Network conditions, aiming to stabilize the KRO price and support the overall health of the Kroma ecosystem.$KRO EconomicsNetwork fees, which are generated from gas fees that users pay within the Kroma Network, are apportioned to Transaction Contributors (Tx Contributors) in the form of KRO, and to KRO Stakers in the form of ETH. Tx Contributors, composed of dApp Builders, are instrumental in establishing the infrastructure that facilitates diverse activities for community members within the Kroma Network.The strategic redistribution of Network fees to these contributors not only fosters well-funded development environments, but also creates opportunities for the attraction of new investment capital from investors. Historical precedents within other Networks like Optimism have demonstrated that this redistribution mechanism can engender a beneficial flywheel effect. This effect can be visualized as below.Users spend gas on Kroma Network and fees are generatedThe fees flow into dApps in the form of KRODApps redistribute fees to users to enhance competitivenessAn increase in user influx attracted by the elevated Annual Percentage Rate (APR) results in more transaction volume and Network FeesMore fees flow into dApps in the form of KRO and the flywheel continuesKRO Stakers, encompassing both dApps and Users, are entitled to a portion of the Network fees, excluding the share allocated to Tx Contributors. Moreover, they possess voting rights to determine the recipients of grants from the Community Impact Fund, a category within the Ecosystem Fund.KRO Stakers may also receive supplementary rewards, so-called “bribes” from dApps seeking to secure voting rights. These rewards are dispensed during designated Bribing Periods, and KRO Stakers exercise their voting rights during the Voting Period, contingent on the magnitude of the dApp’s bribe.In conclusion, the Kroma Network’s fee distribution model is a nuanced and multifaceted mechanism that judiciously balances the interests of diverse stakeholders. By crafting targeted incentives and aligning the interests of builders, stakers, and users, the Network cultivates a robust and sustainable ecosystem conducive to continuous innovation and growth.ConclusionWrapping up, Kroma’s tokenomics represents a well-orchestrated system that aligns network growth, zero-start distribution, and controlled inflation. Through mechanisms such as the sliding model, dynamic KRO minting logic, and a comprehensive fee distribution model, Kroma ensures a transparent and robust financial ecosystem. Furthermore, the strategic allocation of funds, including the Ecosystem Fund, Community Impact Fund, and Utility Fund, fosters development and innovation within the Network.By considering the dynamics of Network activity and the broader economic factors, Kroma’s approach ensures both the growth and stability of the KRO value, reflecting a commitment to fairness, openness, and accountability. This intricate design positions Kroma as a pioneering force in the blockchain space, poised to thrive and adapt in an ever-evolving landscape.On September 5th, Kroma mainnet was launched, and blocks are being generated; however, the KRO token contract has not yet been deployed. The KRO token generation event (TGE) is scheduled to occur in a few months once the ecosystem is deemed sufficiently prepared. At the actual TGE, a certain number of KRO tokens will be generated based on the total accumulated number of blocks and the token generation algorithm. This approach aims to address the initial lack of liquidity and stability for the KRO token from the very beginning, given its zero-start.

Understanding Kroma’s Zero-Start Tokenomics: A Comprehensive Guide

안녕하세요. 위믹스팀입니다.Kroma의 토크노믹스가 공개되었습니다. 재단의 의도를 정확하게 전달하기 위해 번역을 하지 않고 원문을 공지합니다.미디엄 원문 : https://medium.com/@kroma-network/understanding-kromas-zero-start-tokenomics-a-comprehensive-guide-494fdd72164eDisclaimer: This article explores the tokenomics of the Kroma and is provided only for informational purposes. It’s important to note that we are the creators of Kroma and have a vested interest in its success. Please be aware that this article does not constitute financial or investment advice, and readers are encouraged to conduct independent research and seek professional advice before making any decisions related to Kroma. Additionally, readers should recognize the cryptocurrency market’s volatility, understand that Kroma evolves, and be responsible for compliance with applicable regulations. We disclaim any liability for losses arising from the use or reliance on the information in this article.TL;DRKroma’s tokenomics is designed to correlate Network growth with the value of its native token KRO. This includes mechanisms for zero-start distribution, controlled inflation, and Network growth alignment, with dynamic adjustments to KRO issuance based on Network activity.Kroma allocates 38% of the total KRO supply to the Ecosystem Fund, supporting various stages of development, marketing, security, community engagement, and ecosystem building. Other allocations include Community Airdrop, and incentives for the WEMIX Community.Kroma’s minting logic dynamically adjusts the number of KRO created per block, responding to Network activity. Specific parameters, including hard caps for mint increase and decrease, ensure a balanced response to varying Network conditions, supporting both the growth and stability of the KRO price.The Community Impact Fund and Partner Fund within Kroma foster innovation and growth by providing grants and support to early-stage dApps and large-scale projects. The process involves clear cycles of selection, incentivization, voting, and reflection, involving KRO Stakers in decision-making.Network fees are strategically redistributed to Transaction Contributors and KRO Stakers, fostering development and creating investment opportunities. The model includes supplementary rewards and voting rights, crafting targeted incentives that align the interests of builders, stakers, and users, ensuring a robust and sustainable ecosystem.IntroductionKroma’s primary concept revolves around aligning Network growth with the value of its native token, KRO. This structure aims to establish a strong correlation between Network value and KRO value, overcoming the limitations of traditional Layer 2 tokenomics. The approach ensures a clear connection between Network growth and token value appreciation.The foundational principles that guide Kroma’s tokenomics are articulated through a strategic alignment of Network growth, zero-start distribution, and controlled inflation, each contributing to a robust and transparent financial ecosystem.Network Growth Alignment: The growth of the Network is directly tied to the value of KRO, with mechanisms to adjust KRO issuance based on Network activity, more specifically, the amount of gas used within a block.Zero-Start Distribution: No Presale or Pre-Mining, ensuring that all participants are rewarded for their contributions.Inflation Control: The Sliding Model is applied to continuously reduce annual inflation$KRO Allocation at a GlanceBelow figure shows the overall allocation of $KRO tokens.Ecosystem Fund (38%): The Ecosystem Fund is a proactive program meant to accelerate development and growth. The fund will provide grants to projects in all stages and utilize funds for marketing purposes.Community Airdrop (7%): Reward users and dApps for contributing ecosystem growth.WEMIX Community (10%): Allocations for the WEMIX community are designed to be in alignment with the co-growth of the Kroma and WEMIX ecosystems. The WEMIX Community boasts a user base of 9 million users and a highly engaged user pool, particularly in gaming. Kroma recognizes the significant value held by this WEMIX Community, considering it a core group to engage in collaboration with. As part of this collaboration, Kroma will be dedicated to supporting the WEMIX community by providing rewards and offering incentives to users across both chains.Core Team (15%): The core team who’ve been working tirelessly to bring Kroma Network to the masses.WEMIX Foundation (15%): WEMIX Foundation is the biggest supporter and core contributor of Kroma, planning to sequentially support their various Web3-based games, DeFi, NFT, and more within the Kroma ecosystem. Moving forward, we intend to continue collaborating to ensure the mutual growth of these two ecosystems.Investors (15%): Initial financial and strategic investors that help the ecosystem grow faster at the initial stage.More details are explained in the following sections.Ecosystem FundThe Ecosystem Fund is designed to foster development and growth within the Kroma Network. 30% of the total KRO supply is allocated to the Ecosystem Fund. Kroma will use this allocation to support projects at various stages and to fund marketing initiatives. This fund is divided into four main categories:Security Contributor Fund (5%)Community Impact Fund (13%)Partner Fund (7%)Utility Fund (13%)Security Contributor FundAn allocation of 5% will be dedicated to the Security Contributor Fund. Kroma will use these funds to incentivize the entities that help secure the chain. Activities that secure the chain include but are not limited to submitting checkpoint outputs, mediating disputes for asserters and challengers, and submitting validity proofs in the ZKR phase.The Security Council plays a crucial role in Kroma’s upgrades and addressing any potential issues that may arise in dispute challenges, determining them through multi-signature agreements. Rewards for Security Council are also included in the Security Contributor Fund.Community Impact FundThe Community Impact Fund will be utilized to provide grants to early-stage dApps, with decisions made through the votes of KRO Stakers, who are entities that stake KRO to obtain Network fee rewards. The execution of the fund is managed in cycles, each lasting 2 months, and follows a specific sequence.The cycle begins with the Selection Period of 4 weeks, during which applications from dApps wishing to receive grants are received and reviewed. The grant size is determined based on the number of selected dApps and the scale of the ecosystem at that time, with the Kroma Foundation directly performing the selection of early-stage dApps.Following the Selection Period is the 2-week Bribing Period, where dApps that have passed the initial stage prepare rewards to rent voting rights from KRO Stakers. dApps will give out incentives in the process of renting voting rights, which can be seen as an additional incentive for KRO Stakers.After the Bribing Period, a Voting Period of 1 week follows, where the actual voting takes place. Finally, the cycle ends with the Reflection Period of 2 weeks, a time to reflect on the previous cycle and incorporate community feedback. During this period, grants are distributed linearly, with a 2-week vesting term and no cliffs.In summary, the Community Impact Fund represents a dynamic and transparent mechanism within Kroma, fostering innovation and growth. Through a carefully orchestrated cycle of selection, incentivization, voting, and reflection, Kroma will empower early-stage dApps by providing them with the necessary grants and support. By involving KRO Stakers in the decision-making process and maintaining a clear and accountable structure, the Community Fund ensures that the Kroma ecosystem thrives, guided by the collective wisdom and investment of its community. Also, as long as a dApps follows procedures, it can be selected for grants consecutively, with no maximum limit.Partner FundThe Partner Fund is allocated for partnerships with Large-Scale dApps, referring to projects that have already found product market fit and are looking to expand to Kroma Network. Unlike the Community Fund, the selection of dApps for the Partner Fund is made directly by the foundation without undergoing a separate community voting process. Moreover, the term of the grant is subject to a vesting period that includes cliffs. This structure ensures a committed partnership and aligns the interests of both parties over a longer term.Utility FundThe Utility Fund is dedicated to building the Kroma ecosystem, utilizing the necessary resources for Marketing, Bug Bounty, Liquidity Provisioning (Market Making), and other essential functions. All utilized resources will be transparently disclosed, reflecting the commitment to openness and accountability of the foundation to the Kroma community.Community AirdropAn allocation of 7% of the total KRO supply will be dedicated to the community. Due to the nature of airdrops, the Kroma core team, in collaboration with professional third parties, will be responsible for determining airdrop metrics as fairly as possible.The first Airdrop, which will take place at the Token Generation Event (TGE), will distribute around 8% of the total Airdrop amount. The airdrop will target addresses that have:Actively contributed as a builderActively contributed as an userActively contributed as a community memberAll transactions generated from the mainnet, including those generated before the TGE, will be considered.WEMIX CommunityKroma is committed to symbiotically growing alongside the WEMIX ecosystem, playing a crucial role in bridging WEMIX’s multifaceted gaming and DeFi ecosystems to Ethereum.In alignment with this vision, a total of 10% of KRO has been allocated to the WEMIX Community. The distribution of KRO will be conducted through various methods that are not limited to, but include:Swapping WEMIX for KRO at a favorable rateOffering KRO rewards for WEMIX stakersKRO airdrops for WEMIX stakers$KRO Minting LogicKroma’s minting logic dynamically adjusts the number of KRO created per block, responding to the sliding model and network activity.Default Mint Amount shaped by the Sliding ModelKRO will be minted per block with a decaying emissions schedule, more specifically a reduction factor of 7.88% per quarter.These are the fundamental parameters determining the default minting amount per block:KRO Total Supply (Soft Cap): 50,000,000Default Mint Amount: 1Reduction Factor: 7.88%Sliding Window in Days: 90The first sliding epoch will mint 1 KRO per block, and this number will drop to 0.151 KRO per block at the end of Year 6. Although KRO will be emitted perpetually, the KRO minted by the end of Year 6 would round up to around 86% of the total supply as shown in the following figure. Moreover, all who are entitled to earn KRO rewards will get their rewards according to the reward schedule, thus giving those who participate in an early phase a higher advantage of getting more KRO rewards.This structure significantly reduces the overhang risk compared to cases where a large volume is distributed to specific groups (e.g., investors) according to the vesting schedule. As a result, the likelihood of market disruption and other adverse effects is relatively low.Adjusted Mint Amount shaped by Network ActivityThe number of KRO created per block is dynamically adjusted within a certain range to maintain a correlation between the activation level of the Kroma Network and the issuance of KRO. If the Network is more active, generating more network fees, the issuance of KRO increases. Conversely, if the Network is less active, the issuance of KRO decreases.The parameters governing this process are as follows:Block Gas Limit: 30,000,000Block Gas Target (G_target): 5,000,000EIP-1559 Elasticity Multiplier: 6Max. Mint Increase (per block): 3%Max. Mint Decrease (per block): 7%Mint Increase Hard Cap: 10%Mint Decrease Hard Cap: 20%Mint Increase and Decrease per blockThe minting logic responds to Network congestion and fee collection, increasing KRO issuance when the Network is more active and decreasing it when less active.If the previous gas (G_prev) is greater than or equal to the gas target (G_target), the current reward increases by up to 3% per block, with a hard cap of 10%. If G_prev is less than G_target, the current reward decreases by up to 7% per block, with a hard cap of 20%. The consecutive occurrence of four blocks with specific gas conditions triggers the hard caps.Stabilization and ControlThe hard caps on mint increase and decrease ensure that the KRO price is stabilized by controlling the issuance according to Network needs.The Mint Increase Hard Cap is set at 10% to control the circulation of KRO by limiting the maximum amount of tokens minted per block. No matter how much gas is included in a block, the maximum amount of tokens minted per block is limited to Default Mint Amount * 1.1. If a block contains a large amount of gas, it means the Network is congested, and more fees are collected. By limiting the increase in KRO issuance to +10%, it is expected to have a positive effect on the KRO price, as more ETH is collected.On the other hand, the Mint Decrease Hard Cap is set at 20% to ensure that even if the amount of gas included in a block is minimal, the minimum amount of tokens minted per block is limited to Default Mint Amount * 0.8. If a block contains a small amount of gas, it indicates that the Network is not congested. By reducing the issuance of KRO by 20%, the minting logic adapts to the lesser amount of ETH collected, helping to defend against a price drop to a certain extent.The different values for the Mint Increase and Decrease Hard Caps in the KRO minting logic are deliberately designed to provide nuanced control over the KRO issuance. By setting these caps at 10% and 20%, respectively, the logic ensures a balanced response to varying Network conditions, supporting both the growth and stability of the KRO price. This approach reflects a thoughtful consideration of the Network’s dynamics and the broader economic factors influencing the Kroma ecosystem.Finishing off, the KRO minting logic is a sophisticated mechanism that aligns the issuance of KRO with the Network’s activity. By dynamically adjusting the minting rate based on specific parameters, it ensures a balanced and adaptive response to changes in Network conditions, aiming to stabilize the KRO price and support the overall health of the Kroma ecosystem.$KRO EconomicsNetwork fees, which are generated from gas fees that users pay within the Kroma Network, are apportioned to Transaction Contributors (Tx Contributors) in the form of KRO, and to KRO Stakers in the form of ETH. Tx Contributors, composed of dApp Builders, are instrumental in establishing the infrastructure that facilitates diverse activities for community members within the Kroma Network.The strategic redistribution of Network fees to these contributors not only fosters well-funded development environments, but also creates opportunities for the attraction of new investment capital from investors. Historical precedents within other Networks like Optimism have demonstrated that this redistribution mechanism can engender a beneficial flywheel effect. This effect can be visualized as below.Users spend gas on Kroma Network and fees are generatedThe fees flow into dApps in the form of KRODApps redistribute fees to users to enhance competitivenessAn increase in user influx attracted by the elevated Annual Percentage Rate (APR) results in more transaction volume and Network FeesMore fees flow into dApps in the form of KRO and the flywheel continuesKRO Stakers, encompassing both dApps and Users, are entitled to a portion of the Network fees, excluding the share allocated to Tx Contributors. Moreover, they possess voting rights to determine the recipients of grants from the Community Impact Fund, a category within the Ecosystem Fund.KRO Stakers may also receive supplementary rewards, so-called “bribes” from dApps seeking to secure voting rights. These rewards are dispensed during designated Bribing Periods, and KRO Stakers exercise their voting rights during the Voting Period, contingent on the magnitude of the dApp’s bribe.In conclusion, the Kroma Network’s fee distribution model is a nuanced and multifaceted mechanism that judiciously balances the interests of diverse stakeholders. By crafting targeted incentives and aligning the interests of builders, stakers, and users, the Network cultivates a robust and sustainable ecosystem conducive to continuous innovation and growth.ConclusionWrapping up, Kroma’s tokenomics represents a well-orchestrated system that aligns network growth, zero-start distribution, and controlled inflation. Through mechanisms such as the sliding model, dynamic KRO minting logic, and a comprehensive fee distribution model, Kroma ensures a transparent and robust financial ecosystem. Furthermore, the strategic allocation of funds, including the Ecosystem Fund, Community Impact Fund, and Utility Fund, fosters development and innovation within the Network.By considering the dynamics of Network activity and the broader economic factors, Kroma’s approach ensures both the growth and stability of the KRO value, reflecting a commitment to fairness, openness, and accountability. This intricate design positions Kroma as a pioneering force in the blockchain space, poised to thrive and adapt in an ever-evolving landscape.On September 5th, Kroma mainnet was launched, and blocks are being generated; however, the KRO token contract has not yet been deployed. The KRO token generation event (TGE) is scheduled to occur in a few months once the ecosystem is deemed sufficiently prepared. At the actual TGE, a certain number of KRO tokens will be generated based on the total accumulated number of blocks and the token generation algorithm. This approach aims to address the initial lack of liquidity and stability for the KRO token from the very beginning, given its zero-start.

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