Solving Real-World Financial Problems with On-Chain Economic Innovations
Disclaimer: This article does not constitute financial or legal advice.
With the launch of KOY Network underway and GoodBlock as a key technical partner in that initiative, we’re excited to be rolling out a series of articles going into the details of how GoodBlock is driving innovation on KOY. In case you missed it, be sure to check out last week’s article where we give a high-level overview of KOY Network and the significance of the partnership with GoodBlock.
In this article, we’ll be diving deeper into the tokenomics that GoodBlock CEO, Douglas Horn, helped conceptualize and how these design choices are positioning the KOY Network to fill an important gap, not only in Web3 economic systems but more importantly, real-world financial markets. Keep reading to learn more about KOYN, the network’s native token and the unique utility that allows the ecosystem to facilitate multicurrency exchange without the liquidity inefficiencies of traditional DeFi exchange systems. We’ll also be diving into how the network mitigates asset volatility through unique functions, like a daily exchange rate and the KOYN Buy Back function.
If you still have questions, be sure to jump down to the bottom of this article for details on our upcoming AMA with KOY Network and GoodBlock.
KOYN Utility: An Atomic Intermediate Trading Token for Real-World Scale
The heart of KOY Network’s economic model lies in the KOYN token. Its primary utility is to serve as an asset facilitating the exchange of other tokenized assets, especially stablecoins from various African countries. Due to the private design of the KOY Network, the ecosystems exchange system can carry out unique functions that wouldn’t be possible on other protocols. “We are joining up Africa using one ledger on the KOY Blockchain Network, as financial infrastructure for Africa,” said KOY Network CEO, Richard Erikodi.
In traditional DeFi, if an ecosystem wanted to create multiple liquidity pools for various trading pairs, there would need to be separate pools for each pair. This creates a big market problem known as trapped liquidity, where one liquidity pool may attract most of an ecosystem’s capital, leaving others to suffer due to a lack of market-making. Since a core mission of KOY Network is to solve financial disparities between various countries across Africa, it was important that the network solve this problem. This is where GoodBlock was able to offer guidance, leveraging years of experience in tokenomic design, and landed on the true utility of KOYN – to serve as an Atomic Intermediate Trading Token between the network’s various financial actors.
That’s a lot of fancy words, but what does it really mean? Essentially, any time someone wants to trade Token A for Token B, rather than a direct swap, the smart contract first trades Token A for KOYN. Then that KOYN is traded for Token B. All of this happens under the hood, and the end user only sees Token A being traded for Token B. However, since KOYN is acting as an Atomic Intermediary, the capital being allocated to trading pairs is shared, not only between Token A and Token B, but also Token C, Token D, and so on.
Most interesting is that the only token a user can’t trade for through the network’s primary exchange contract is KOYN itself. There will be other avenues for interested parties to acquire KOYN and stake it to provide liquidity for this function, but within the context of a traditional layperson, they may not even know that KOYN exists. However, they will feel the impact that KOY Network brings to their day-to-day finances. What’s really exciting is that because the network is facilitating exchange between various currencies across Africa, the entire continent could see a massive increase in economic liquidity.
The utility of KOYN is demonstrated by the fees generated from token exchanges going into the rewards balancer contract, with the goal of sustaining the network. This could be quite a large amount of KOYN when one begins to conceptualize many countries across Africa all using it as a medium of exchange.
Lowering Volatility Through Daily Exchange Rates & Network Buyback Function
In countries across Africa, government entities set daily exchange rates for local currencies. The KOY Network will be adhering to these daily exchange rates, in order to ensure easy adoption at a local level. Similarly, there will be a daily exchange rate set for KOYN itself.
With this in mind, the network will have a fund where anyone who wants to sell KOYN will be able to do so at 5% below the daily rate. KOY Network will buy it and maintain enough reserves to make these purchases.
Knowing that you can always sell KOYN at a given price will help the entire KOY economy run smoother by lowering volatility. It also improves the user experience by ensuring that there is always a market for KOYN to be bought and sold.
Token Distribution & Staking Rewards
As with all Web3 projects that GoodBlock takes part in, it’s important that there is an equitable distribution of tokens from the start. KOY Network is no different, and the 1 billion KOYN tokens are planned to be distributed as follows:
- 100 Million for Founders, Advisors & Partners: To those who have been helping to launch KOY Network – vested over a 4-year timeline.
- 50 Million for Presale: Initial token presale.
- 350 Million for IEO: Initial Exchange Offering for public purchase.
- 150 Million for Ongoing Auctions: Distributed through transparent monthly auctions as part of the network’s tokenomic design.
- 350 Million for Staking Rewards: To be distributed to those who hold and stake KOYN for a set period of time.
The staking rewards are a particularly notable part of the KOY Network’s tokenomics; users will be able to stake their tokens into various pools with increased rewards the longer they stake. The staking rewards system gamefies the network’s liquidity creation over a long timeline, allowing applications to easily project the network’s economic viability.
Learn More about KOYN Tokenomics at our Upcoming Event
We hope you’re just as excited as us for the launch of KOY Network and its potential to revolutionize financial markets. If you’d like to learn more about KOY, head over to koy.network or check out our recent event with the KOY Network team.
We’ll also be hosting another event on October 13 at 16:00 UTC, so be sure to follow us on Twitter to stay in the loop on updates and other news.
For details on acquiring KOYN Tokens, check out the KOYN Fair Sale:
The KOY team is currently conducting a token presale to give community members and those in the Antelope ecosystem an opportunity to acquire KOYN tokens at an attractive rate.
To further honor their roots in the Antelope ecosystem, they’ve initiated the #AntelopeAccess program. Through this program, individuals can join the KOY Telegram channel and exchange their Antelope-based tokens for KOYN.
Once the #AntelopeAccess program concludes, a Fair Sale will be launched on the koy.network website. During this Fair Sale, KOYN tokens can be purchased using USDT from the Ethereum blockchain.
GoodBlock Technologies is an app developer and Block Producer candidate on the Telos Blockchain Network, with a focus on 2 of the pillars of Web3.0; Governance (decidevoter.app) and Decentralized Cloud Storage (dstor.cloud). Vote for goodblocktls, and learn more at goodblock.io.
KOY Network is a distributed ledger system designed to support smartphone apps serving Africa and its diaspora situated across the globe. Learn more at koy.network.
GoodBlock Website: https://goodblock.io/
KOY Network Website: https://koy.network/
KOY Network Twitter: @KoyNetwork
GoodBlock Twitter: @goodblockio
dStor® Twitter: @dStor_cloud
decide® Voter App Twitter: @decide_Voter
Disclaimer: This article is for informational purposes only and should not be considered as financial or legal advice. Readers should conduct their own research and consult with professionals before making financial decisions. These tokenomics are subject to change based on legal guidelines or requirements.