Staking

Introduction

• Overview of the Staking System
  • The staking system allows all users to stake their KAT tokens with a validator of their choice. Users are eligible to receive rewards, which can be claimed through withdrawal operations.
  • The staking system also manages the reward distribution for claimers, lieutenants, and validators.
  • 330+ new validators, totaling 35,000 KAT.
• Purpose and Benefits of Staking
  • People with significant capital but lacking marketing exposure can also contribute to our protocol.
  • Incentivizes people to stay actively engaged with the protocol and follow trends.
• Definitions and Terminology
  • KAT: Karat Token
  • Claimer: A new user who gains a certain Karat Score through a Claimer NFT. The claimer must choose a validator to claim rewards.
  • Karat Score: The score of a claimer is determined by our evaluation system.
  • Lieutenant: A role that provides referrals for validators to attract new claimers.
  • Validator: Provides nodes for claimers and offers a staking pool.
  • Epoch: A unit of time used to track daily cycles within contracts. Ideally, 1 epoch = 1 day.

System Architecture

• High-Level Architecture Diagram

Reward Algorithm

• Introduction to the Reward System

  • A certain number of KAT will be allocated each epoch. The initial reward is 2,400,000, which will then gradually decrease by epoch.

    Daily rewards decrease by 0.2%, settled every day at 3 PM PST.

    Current KAT reward = (1000−2×epoch)×Initial Reward10001000(1000−2×epoch)×Initial Reward

    For example:

    Past 1 month: Daily KAT reward = 94% * Initial Reward

    Past 2 months: Daily KAT reward = 88% * Initial Reward

    Past 3 months: Daily KAT reward = 82% * Initial Reward

  • We allocate rewards through a score calculation system. Once the claimer mints tokens through their Karat Score, we distribute scores to different roles. The rewards are then calculated according to the proportion of scores. Abstractly speaking, the reward each role can get is as follows:

    Role Reward = Score obtained by the roleTotal ScoreTotal ScoreScore obtained by the role * Current KAT Reward

    Therefore,

    Sum of scores obtained by all roles = Total Score

• Method of Calculating Rewards

Example:

Validator 1 and Validator 2 both have 1,000 KAT staked.

A new claimer receives a 1,500 Karat score through the lieutenant to claim.

The epoch's KAT reward is 2,000 KAT:

• Claimer score = 1,500 * 2 / 3 = 1,000
• Weighted score = 1,500 * 1 / 3 * (1 + (1,000 / 2,000))^3 = 1,687
• Staker score = 1,687 * 0.8 = 1,350
• Validator score = 1,687 * 0.2 * 0.8 = 270