$KARRAT Allocation for Scalable Node Staking Rewards

KIP Title: $KARRAT Allocation for Scalable Node Staking Rewards
Author: AMGI Studios
KIP Type: Non-Constitutional (Funding)

Summary

This KIP proposes an allocation of 20,000,000 $KARRAT from the KARRATco Treasury to fund a 12-month staking rewards program for participants locking $KARRAT into StudioChain Resiliency Nodes.

The program introduces a scalable, community-driven APY model, where rewards increase with total network participation, reaching a maximum 20% APY if 100,000,000 $KARRAT is staked.

The more the community collectively contributes to securing the Resiliency Node network, the greater the rewards unlocked for all. Any portion of the 20,000,000 $KARRAT that is not distributed over the 12-month period will be returned to the KARRATco Treasury.

Abstract

As StudioChain approaches mainnet launch, the KARRATco DAO has an opportunity to bootstrap decentralized network security and incentivize participation through a community-aligned staking rewards model. This proposal requests 20,000,000 $KARRAT to fund a 12-month program supporting and bootstrapping StudioChain’s Resiliency Node layer.

Rather than issuing fixed rates, this program adopts a scalable model where APY rises in proportion to the total $KARRAT staked, capped at 20% if the community stakes the full 100,000,000 $KARRAT available. This mechanism gives the community direct influence over the program’s output, reinforcing the design philosophy of StudioChain’s pool-based staking system.

If less than the full amount is staked, only a corresponding portion of the rewards will be distributed. Any unused funds will revert to the DAO after the program ends.

Motivation

StudioChain is a next-generation L2 tailored for high-performance applications in gaming, AI, and entertainment. Its security and decentralization rest on the success of its Resiliency Node network.

At launch, it is likely that StudioChain will not yet produce meaningful sequencer revenue. Rather than delay community participation or risk insufficient security, this KIP proposes a time-bound staking rewards program to bootstrap early staking for security, aligned with StudioChain’s community-centric ethos.

The scalable APY design puts control in the hands of KARRAT holders. The more they collectively lock into the network, the greater the collective reward. This design aligns incentives, ensures a fair and transparent mechanism, and minimizes unnecessary emissions.

Rationale

The previous fixed 20% APY model has been enhanced into a community-driven scaling mechanism. This approach incentivizes early participation while protecting DAO resources.

By creating a curve where the APY grows linearly up to 20% based on the total KARRAT staked (max 100M), participants are rewarded proportionally based on actual engagement and contribution to network security.

This model is an extension of StudioChain’s broader staking logic: community ownership, pooled security, and scalable opportunity. It ensures that rewards are proportional to effort and stake, and that incentives are earned for providing a critical function to StudioChain, and are not just given.

Specification

Requested Allocation

• 20,000,000 $KARRAT from the KARRATco Treasury

Program Duration

• 12 months from StudioChain mainnet launch

Reward Model

• Scaled APY model up to 20%
• Full 20,000,000 $KARRAT will be emitted only if 100,000,000 $KARRAT is staked
• Rewards distributed proportionally based on each participant’s share of total staked KARRAT across all Resiliency Nodes

Eligibility Criteria

• Locking $KARRAT into a Resiliency Node (individually or via pooled mechanism)
• Holding a qualifying My Pet Hooligan NFT to access node participation

Lock-Up & Unstaking

• After staking $KARRAT into a Resiliency Node, tokens are locked for the first 6 months
• During months 7–12, unstaking is permitted but will be subject to a percentage-based tax (specific rate to be detailed in implementation)

Unused Rewards

• Any portion of the 20,000,000 $KARRAT not distributed by the end of the 12-month period will be sent to the burn address 0x000000000000000000

Implementation

Treasury Allocation

• 20,000,000 $KARRAT will be allocated to a dedicated staking reward contract

Reward Distribution Contract

• Smart contract will include logic to scale emissions based on total $KARRAT staked
• Max cap: 100,000,000 $KARRAT Staked/Locked = 20% APY

Reward Emissions

• Emissions will be distributed at regular intervals (e.g., monthly) over 12 months
• No cliff, vesting, or lock-up on rewards

Lock & Unstake Logic

• Initial 6-month lock period on staked KARRAT
• Unstaking during months 7–12 is allowed but will trigger a tax penalty (parameters to be finalized in implementation layer)

Transparency & Reversion

• Emissions and staking activity will be publicly viewable on-chain
• Any unused KARRAT at the end of the program will automatically be burnt

Implementation Costs

• KARRAT Foundation will cover development, deployment, and audit costs. No additional funding is requested from the Treasury beyond the 20,000,000 $KARRAT reward pool

Timeline & Cost

• Start Date: At StudioChain mainnet launch
• Duration: 12 months
• Total Cost: 20,000,000 $KARRAT (scalable based on staking participation)
• Unused Allocation: Will be burnt if not allocated as rewards