Executive Summary

We present a comprehensive three-part proposal aimed at migrating KuSwap's Decentralized Exchange (DEX) to v3. These upgrades will firmly position KuSwap at the cutting edge of DeFi technology, driving the next wave of innovation and growth.

This proposal is split into:

• Part 1: Protocol Improvements (PASSED)
• Part 2: Tokenomics Enhancements
• Part 3: Migration Strategy

Please note: No modifications will be enacted until all three sections of this proposal have been meticulously deliberated upon and have successfully navigated the voting process.

PART 2: Tokenomics Enhancements

Overview

The tokenomics enhancements proposed here have been carefully examined and discussed extensively on our official KuSwap Medium blog here and within our engaged KuSwap Community Channels.

A. Initial Supply Distribution

The initial supply of KUS tokens in KuSwap v3 will be set at 36,920,000. This allocation is designed to cover the following:

1. Existing Holders (32,000,000 KUS or 86.67% of the initial supply)

   • Migration of Existing KUS Holders
   • Migration of Existing KUSGOV Holders
   • Migration of KUS LP Pairs

2. Team: (2,520,200 KUS or 6.83% of the initial supply)

3. Holder Bonus Pool (369,200 KUS or 1% of the initial supply)
   KUS Holders who migrate early will receive more rewards than those who do it later. The process will be detailed in Part 3: Migration Strategy.

4. Airdrop to KUSGOV Holders (738,400 KUS or 2% of the initial supply)
   Tokens will be airdropped to KUSGOV holders who lock into KUSGOV before the snapshot date. The details will be announced in Part 3: Migration Strategy.

5. Airdrop to Early KUS LPs (553,800 KUS or 1.5% of the initial supply)
   Tokens allocated for Liquidity Providers. The details will be announced in Part 3: Migration Strategy.

6. Airdrop to KUSFOX and KUSFOXES Holders (369,200 KUS or 1% of the initial supply)

7. Airdrop to Migration Community Activities (369,200 KUS or 1% of the initial supply)

B. Emissions Allocation

In KuSwap v3, the emissions will be distributed as follows:

• LP Rewards and Rebase (88%)
• Team (9%)
• Marketing: (3%)

C. Emissions Decay

Decay: To maintain a sustainable emission model, a decay of 3% will occur at the end of every epoch (week), gradually reducing the emission rate over time.

D. Maximum Supply and Minting Governance

The maximum supply of KUS tokens in KuSwap v3 is set at 47 million. However, veKUS holders will have the authority to decide whether to mint additional tokens for purposes of increasing emissions or expanding to other chains. Any minting beyond the 47 million supply will require a governance voting process and will be subject to a 72-hour timelock, ensuring transparency and community consensus in decision-making.

Expected Outcomes

The tokenomics enhancements proposed aims to:

A) provide a fair migration of value for the KUS and KUSGOV holders while incentivizing earlier migration and participation in the liquidity pools,

B) Provide for continuous rewards for participants, as well as continuous funding for marketing and development,

C) set the KUS token on a path of decreasing emissions, and

D) provide for the possibility of additional minting for emissions and expansions, provided that any such activities undergo governance proposals and a 72-hour timelock, ensuring transparency and community consensus in decision-making.

Does KUSGOV concur with the proposed tokenomics enhancements?