Unveiling Kodo’s Tokenomics & Launch Details
Kodo Exchange is soon to launch on the Taiko mainnet. As we stand on the brink of a groundbreaking journey into decentralized finance, it’s time to delve into the heart of our ecosystem: the Kodo tokenomics and launch details. Our meticulously designed tokenomics model is crafted to foster growth, reward participation, and ensure a sustainable future. The launch on the Taiko mainnet will be a significant milestone, marking our commitment to revolutionizing the DeFi landscape. Let’s embark on this exciting adventure together and explore how Kodo is set to change the game.
Before we delve into the specifics, it’s crucial to highlight Kodo’s deep commitment to supporting the Taiko ecosystem. We will permanently reserve 30% of the voting power for the public goods within this ecosystem. We sincerely invite Taiko to co-govern the protocol, and pledge to work closely with them to allocate protocol revenues in the form of public goods funding. This is aimed at supporting original projects and ambitious builders within the Taiko ecosystem.
Kodo aims to become the go-to liquidity hub for protocols wishing to deploy on Taiko. We invite all protocols and creators on Taiko to list their tokens on Kodo, and leverage our fantastic features to bootstrap and boost liquidity in a quick and capital-efficient manner. Protocols can lock veKODO and deposit incentives for veKODO voters to direct KODO emissions to their pools. In return for their votes, veKODO holders receive 100% of trading fees and incentives from the pools they choose, creating a self-balancing flywheel that rewards the most productive players in the system.
Token Distribution: A Balanced Approach
The initial supply of $KODO is 400M, with 360M (90%) locked for 4 years in the form of $veKODO, and the remaining 40M (10%) allocated as liquid $KODO.
veKODO Allocation
Community Airdrop: A share of the initial supply will be airdropped as $veKODO to potential supporters within the Taiko ecosystem, including:
- Kodo testnet users
- Loopring community members
- key NFTs holders from historical Taiko testnets
Drum Guild: Kodo will establish the Drum Guild as a catalyst for the growth of the Taiko and Kodo ecosystems. These $veKODOs will be used to vote and direct the protocol’s reward distributions towards the most critical liquidity pairs for the Taiko ecosystem, such as WETH/USDC and WETH/TAIKO.
- All accumulated rewards from voting will support the most vital projects and builders within the Taiko ecosystem through Public Goods Funding (PGF). We plan to actively communicate with Taiko Labs and consider their advice, aligning with their Retrospective Public Goods Funding (RPGF) approach. We will meticulously design this program and share more details in the future.
- Until the PGF program is finalized, accumulated trading rewards will incentivize the ecosystem’s core trading pairs (in the form of bribes).
Kodo Odyssey: 40% of the initial supply is dedicated to supporting and incentivizing protocols and users that positively contribute to the Kodo flywheel, including projects that provide bribe incentives to liquidity pools, protocols, and users locking $veKODO, and trading pairs with significant volume. Rewards will be distributed on a monthly basis. More details coming soon.
Taiko Labs: Kodo Exchange’s mission is to become a native liquidity public good on Taiko, a goal that cannot be achieved without Taiko’s support. Kodo will allocate 10% of the initial supply in the form of $veKODO to Taiko Labs, inviting them to co-govern Kodo Exchange and share in the protocol's reward income.
KODO Pools: 5% will be permanently voted towards trading pairs that include $KODO, supporting the Kodo protocol in maintaining healthy liquidity.
KODO Allocation
Voting Incentives: Upon launch, Kodo will not provide initial liquidity for project trading pairs. Instead, we will allocate $KODO bribes (up to 10M) to any liquidity pool that accepts bribes, distributed in proportion to the amount of the bribe.
Genesis Liquidity Pool: 2% (8M) in the form of $KODOtokens will be directly added to the Genesis Liquidity Pool (KODO/WETH) upon the protocol's launch.
Kodo Exchange will use its voting rights in the initial weeks to direct 10%-15% of the rewards towards the KODO/WETH pool, providing ample incentive for the community to supply WETH liquidity to this pair. This serves as an excellent opportunity for early participants to engage in Kodo’s positive flywheel effect.
Contributor Compensation: 3% (12M) in the form of $KODO tokens are allocated to the core contributors of Kodo Exchange, with a six-month lock-up period ($veKODO) followed by a six-month linear release ($KODO). This ensures that the individuals who have played pivotal roles in the development and success of the platform are appropriately rewarded for their contributions.
Incentivizing Participation: The Kodo Flywheel
Central to Kodo’s success is our innovative incentivization mechanism, designed to create a self-sustaining ecosystem. Kodo holders can lock their tokens to receive veKodo NFTs, which grant them governance rights and a share of protocol fees. Here’s how it works:
- Vote-Escrowed Kodo (veKodo): By locking Kodo tokens for up to 4 years, users receive veKodo NFTs, representing their voting power. The longer the lock duration, the greater the voting power, encouraging long-term commitment.
- Governance and Emissions: veKodo holders vote on how emissions are distributed across various liquidity pools. This ensures that the most valuable pools receive the necessary incentives, promoting efficient capital allocation.
- Bribes and Additional Incentives: External projects can bribe veKodo holders to vote for their pools by offering additional token incentives. This mechanism ensures that Kodo’s liquidity is always in high demand, benefiting all participants.
A Sustainable Future: Emission Schedule
Each epoch, $KODO will undergo the following three forms of supply expansion:
Weekly Emissions: Weekly emissions start at 15M $KODO (3.75% of the initial supply), with a release amount decreasing by 1% per week. All released $KODO tokens are allocated to Liquidity Providers (LPs).
Rebase: $veKODO holders receive a $KODO rebase during each epoch proportional to both the LP emission and the $KODO lock-up ratio, reducing vote power dilution for $veKODO.
The calculation formula for the rebase is structured to provide greater rewards to $veKODO holders when the lock-up ratio decreases, incentivizing further lock-ups:
Contributor Compensation: Kodo will ensure its long-term sustainability by having a dedicated group of contributors focused on supporting the product decentralization, documentation, community, and ecosystem. To cover ongoing expenses and all the upcoming development efforts, ~3% of the emissions will be going to the contributor compensation address.
Join the Revolution
Kodo’s tokenomics, designed for a dynamic, fair, and thriving DeFi ecosystem on Taiko, are set to be launched soon. Whether you’re a liquidity provider, a governance participant, or a developer, there’s a place for you in the Kodo community. With the upcoming launch, we’re not just building a protocol; we’re pioneering the future of decentralized finance.
Stay tuned for more updates, and join us as we embark on this exciting journey.
