Black & Tan Paper (V1)
Everything you need to know about KURO's tokenomics.
Last updated
Everything you need to know about KURO's tokenomics.
Last updated
Note: this is the original white paper covering tokenomics only. We'll be publishing a new white paper on NFT staking once all beta testing is complete. For now, please read the following Medium articles on NFT staking:
Kuro Shiba (KURO) is a fair-launch, experimental HRC20 token by and for the community, and is intended as fun and lighthearted way to dabble in DeFi. In tokenizing our favorite Shiba Inu, we created a research-based, dynamic, and transparent protocol that automatically benefits holders with every transaction. “Kuro Shiba” refers to the black & tan Shiba Inu, which are famous for their black fur, tan eyebrow spots, and cream bowtie.
KURO is not your typical moon coin. Kuro Shiba protocol reflects many months of research during the recent meme-and-moon coin boom. This allowed us to pick and choose the features that actually bring value to holders, while ditching the gimmicky—and sometimes even harmful—tokenomics made popular by SafeMoon and its many forks. On top of that, we’ve implemented a robust anti-whale mechanism, and have released the address of the only team-owned wallet to encourage full transparency and trackability of the entire token supply.
PROBLEM
SOLUTION
ICOs, IDOs, Presales, etc. Only benefits those with insider info, allowing them to make 100x at launch and immediately dump on the community.
Fair launch. Everyone has an equal opportunity to purchase KURO tokens, subject to the same rules and limitations.
Quadrillions of Tokens. No practical purpose for minting so many tokens; makes it easier for the team to hide sketchy transactions.
"Scarce" Token Supply. KURO has a max supply of only 500 million tokens. Every token is accounted for and easily trackable.
Initial Token Burns. Just a gimmick—burning 50% of token supply so close to launch has no beneficial impact on per-token price.
Circulating Token Burn. 22.22% of the circulating token supply was burned after launch to stabilize price.
10-20% Tax. Percentage is impractically high; heavy taxation makes it burdensome to make transactions.
5% Tax. KURO launched with only 5% tax on transactions, split two ways to benefit holders. These values are dynamic.
Automatic LP Acquisition. Another marketing gimmick—devalues the token over time, leading to an eventual crash.
LP Incentives. No problematic auto LP code exists in KURO. Instead, we incentivize LPs with exclusive NFT airdrops!
Static Buy Limit. Usually stuck at 0.5% of the total token supply, which makes sense at launch but quickly becomes too limiting.
Dynamic Transaction Limit. KURO's max transaction limit applies to buying and selling, and scales dynamically with market cap.
Ownership Renounced. Project becomes abandoned and destroys any long-term potential; can only be a pump and dump.
Dynamic Contract. Dynamic contract to grow and adapt along with the community. Holders can vote on contract decisions.
Ethereum/Binance Smart Chain. Slow transactions, high gas fees, and even the most secure DEXs are prone to flash loan attacks.
Harmony. Ultrafast network having 2-second finality, near-zero gas fees, and flash loan attacks are not possible on ViperSwap.
Max Supply: 500,000,000 (500 million)
90% Liquidity: 450,000,000 (450 million)
Available for trading on ViperSwap
10% Development: 50,000,000 (50 million)
Set aside for development costs
Manual Token Burns: 100,000,000 (100 million)
20% of total token supply removed from circulation and burned forever
Deflationary + unmintable + burnable
100% transparent + 100% trackable + 0 hidden tokens
90% of the total token supply is provided as initial liquidity on ViperSwap. Unlike DOGE and SafeMoon, KURO has a maximum supply of only 500,000,000 (500 million) tokens. The current meta is for moon coins to boast a total supply of 1,000,000,000,000,000 (1 quadrillion) tokens or more. In our view, there is no need for any one person to hold billions—or even trillions—of tokens. Any benefit to having such a large token supply is purely psychological.
Part of the psychology behind holding trillions of a moon coin is the argument that “if X moon coin gets to $1, then I’ll be rich.” However, the reality is that no moon coin with a total supply of 1,000,000,000,000,000 tokens is ever going to reach $1 per token. The market cap required to reach that amount—$1 quadrillion—is simply unattainable. Even the global crypto market cap is just over $1.5 trillion.
Total market cap = price per token x total # of tokens.
KURO seeks to strike some balance between the ultra-scarce Bitcoin vs. the preposterously abundant moon coin. To be clear, a total token supply of 500,000,000 KURO is not actually scarce. The total supply of KURO tokens is large enough to provide sufficient initial liquidity—i.e., 450,000,000 KURO—on ViperSwap, and to maintain a low entry point for buyers. For example, even if the price of KURO increases 100x from launch, each KURO token will remain well under a penny.
At launch: 450,000,000 KURO = 20,000 ONE.
Because KURO is a fair launch project, there is zero fundraising available from presales, seed rounds, IDOs, ICOs, or the like. Accordingly, 10% of the total token supply is set aside to secure enough funding to keep the project running smoothly, without ever having to solicit donations from the community. We also kept the development tokens to a minimum so the community never needs to worry about a significant drop in price resulting from the team selling its tokens.
You can even track how often the team takes profits by reviewing transactions on our one and only development wallet. For full transparency and accountability, the KURO team owns only one wallet, making it impossible for the team to keep hidden tokens or make secret transactions. It is central to the Kuro Shiba ethos that every single KURO token is easily and publicly accounted for.
20% of the total token supply—100,000,000 (100 million) KURO—was manually burned after launch, effectively removing them from circulation forever. The current meta is to set aside a certain number of coins (e.g., 50% of the total moon coin supply) to burn at launch. However, doing so provides absolutely no benefits for the per-token price because the burned moon coins were never in circulation or part of liquidity. Those tokens might as well have never existed. Thus, initial token burns are completely pointless and serve no purpose outside of being a marketing gimmick.
KURO did not set aside any tokens to burn right at launch. Instead, we simply minted less tokens to begin with, i.e., a max supply of only 500,000,000 KURO, with 450,000,000 KURO being added as liquidity to ViperSwap. Then, a full day after launch, 20% of the total token supply (i.e., 22.22% of the circulating token supply) was unexpectedly removed from circulation forever. Specifically, in response to concerns about a single wallet circumventing KURO’s whale-deterring mechanism using a bot, that wallet owner burned 100,000,000 of their own paid-for KURO tokens (valued at ~$30,000 USD at the time) in a series of 4 transactions:
Unlike gimmicky and pointless initial burns, this manual burn of circulating KURO tokens after launch actually helps stabilize the per-token value of KURO. This means 1/5th of the entire KURO token supply has been sent into the “black hole” forever, leaving a total maximum token supply of only 400,000,000 KURO. (The circulating supply is less than this, due to the 1% automatic burn feature in KURO’s contract, wherein 1% of every transaction is sent to the “black hole” burn address.)
To read more about the burn and why it happened, check out our Medium article.
No automatic LP acquisition
5% trading fee on ViperSwap
4% of every trade automatically distributed to holders
1% of every trade automatically burned forever
Maximum transaction limit to deter whales, scales dynamically with market cap
Dynamic contract that can adapt and grow with the community
The KURO contract does not contain any code for automatic LP acquisition. Automatic LP acquisition is the primary marketing gimmick made popular by SafeMoon and its many forks, wherein each transaction is taxed and a portion of that tax gets added back to the LP as an equal pair. This seems like a good idea in theory but, in practice, the only people benefitting from automatic LP acquisition are the moon coin devs—not the community.
Here’s what really happens in automatic LP acquisition: the moon coin devs regularly skim the automatically-added LP (paid for by the community!) from the liquidity pool and then sell off only the moon coins. This routine and lopsided selloff steadily devalues the tokens and leads to an eventual crash. It is important to differentiate secret LP skimming from a team legitimately taking profits, because the moon coin devs are one-sidedly profiting from a “feature” that is heavily marketed as benefitting the community.
To be clear, the KURO team will take profits, but never in a way that will tank the price of KURO.
Because the KURO contract does not contain automatic LP acquisition, Kuro Shiba protocol relies on the community (you!) to help provide liquidity. The team provided 20,000 ONE as initial liquidity, but adding KURO-ONE token pairs back to the DEX helps the ecosystem. High liquidity = easy swaps back and forth; low liquidity = the risk of being unable to swap your tokens back.
KURO’s lack of automatic LP acquisition is intentional, as we believe providing liquidity should be voluntary—not forced on traders for the sole benefit of the devs (as is the case with traditional moon coins). You can choose whether or not you want to provide liquidity and, if you do become a liquidity provider, you can always take out your LP tokens and split them back to KURO and ONE at any time.
To incentivize adding liquidity to ViperSwap, we will be holding various contests that reward the top and/or random liquidity providers with exclusive KURO NFT airdrops. We will also be implementing a tiered reward system, which will reward random liquidity providers with NFT airdrops when the total liquidity of KURO reaches certain milestones. You can read more about planned NFT airdrops here.
KURO launched with only a 5% initial tax on transactions, split two ways to benefit holders: (1) passive rewards and (2) automatic burn. While the current meta is for moon coins to charge a high tax of ~10-20% per transaction, we find that huge transaction fees are actually more burdensome than beneficial to users. Specifically, charging such a heavy tax rewards long-term holders but deters users from actually transacting the tokens. This is a bit backwards to us, as we believe tokens are meant to be used and not hoarded—especially on an ultrafast and cheap-to-transact network like Harmony.
4% of every KURO trade on ViperSwap is proportionally and directly distributed to KURO holders’ wallets as a reward, in what is known as “reflection.” The 4% transaction fee gets split pro rata among all the holders, based on how many total KURO tokens each holder has in their wallet. No need to delegate your wallet, wherein the rewards can take many epochs to kick in; no need to stake your tokens, which often requires a long lock-up period; and no need to yield farm, which comes with the risk of impermanent loss. With passive rewards, all you have to do is HODL!
KURO is a deflationary token—no new tokens can ever be minted, and the token supply continues to decrease whenever someone buys or sells KURO on ViperSwap. Specifically, 1% of every KURO trade on ViperSwap is automatically burned to a “black hole” address (0x0000000000000000000000000000000000000001). This 1% burn fee helps to steadily increase the per-token value of KURO, occurs automatically to eliminate the need for manual burns, and benefits the per-token price of KURO much more than burning half the supply at launch.
To deter whales from scooping up KURO when the price is low and then dumping on the rest of the community when the price goes up, KURO includes a maximum transaction limit that scales dynamically with its market cap. Some moon coins include a static buy limit, e.g., 0.5% of the total token supply, but this strategy has two major shortcomings. First, limiting buy orders to 0.5% only makes sense shortly after launch when liquidity is low. Second, the buy limit does nothing to prevent whales from dumping their tokens all at once and causing a large negative price impact.
Kuro Shiba protocol addresses both of these issues. First, KURO’s maximum transaction limit is 1% at launch, but will be adjusted whenever the market cap reaches a set of predetermined goals. This is possible due to the dynamicity of KURO’s contract, which allows certain values to be manually adjusted even after deployment. Second, the maximum transaction limit applies to buying, selling, and all other transfers of KURO tokens. This deters whales not only from buying a huge amount in a single transaction, but also tanking the price by selling a large amount of tokens in a single transaction.
Although whales can still exist, KURO’s robust anti-whale mechanism prohibits whales from loading up and/or dumping their tokens at all once. Instead, anyone aspiring to be a whale will need to make many micro-transactions, essentially requiring them to DCA into KURO over time. Each whale’s buys will increase the price of their subsequent buys, disallowing any one person to pick up a huge supply of KURO at a single low price. Similarly, whales will need to slowly sell off their tokens, instead of dumping them all at once.
As an added layer of security, the UniV2Router (used by ViperSwap to split LP tokens back into the original token pair) is also subject to KURO’s maximum transaction limit. That means that liquidity providers can only withdraw their LP tokens up to the maximum KURO amount per transaction, thus further limiting the negative impact whales can have on the price.
MARKET CAP GOAL (USD)
MAX TX LIMIT (% of total tokens)
MAX TX LIMIT (# of KURO tokens)
At launch
1.0
5,000,000
$10,000
2.0
10,000,000
$25,000
3.0
15,000,000
$50,000
4.0
20,000,000
$100,000
5.0
25,000,000
$500,000
10.0
50,000,000
$1,000,000
N/A
N/A
For example, if KURO reaches a market cap of $500,000, then any single KURO transaction will be limited to 10% of the total token supply (50,000,000 KURO) in accordance with the above schedule. If KURO then falls back below $500,000, the maximum transaction limit will NOT be reduced, because the $500,000 goal was already reached. The easiest way to keep track of the current maximum transaction limit is to check Discord. Note that you can still buy as many KURO tokens as you want, but you’ll need to do it in multiple transactions.
The KURO contract is dynamic in order to promote the long-term health and viability of the project. The current meta is for moon coins to renounce ownership and make the contract unchangeable after deployment, but these “trust building” tactics render the moon coins essentially abandoned at launch and destined to be a pump-and-dump scheme. Any necessary changes after launch would require a new contract altogether, which would make the original moon coins obsolete.
To address this problem, the KURO contract can be changed after deployment. This allows KURO to grow along with the community and adapt according to its needs, which is essential for its long-term success. Specifically, the KURO contract can be adjusted according to a pre-determined schedule, e.g., the maximum transaction limit that scales dynamically with KURO’s market cap. Additionally, the community can vote to change the following values in the contract:
Reward % (4% at launch)
Burn % (1% at launch)
Max tx limit % (1% at launch)
KURO's dynamic contract has already proven to be vital in just the first few weeks after launch. For example, KURO has partnered with TokenJenny to launch its very own Gem Mine, which would not have been possible if contract ownership was renounced. That is, in order for the Gem Mine to function, the KURO contract needs to exclude the Gem Mine address from rewards and fees.
Similarly, incentivized pools on any DEX or farm also require KURO to turn off rewards and fees. If the contract were renounced or static, KURO would not be able to participate in these fun projects or collaborate with dApps at all. In our view, the limitations resulting from renouncing ownership far outweigh any potential benefits, and would be antithetical to KURO's long-term vision of building community and promoting growth on Harmony.
This is what makes KURO truly by and for the community.
