Hello, this is the K STADIUM team
We are pleased that we have completed the preliminary design of R2E, which will soon be available to our SOs and SOMs.
K STADIUM R2E is designed to provide more rewards to users who contribute to the activation of K STADIUM, as well as to increase the value of KSTA, and the utilization of SOP through coordination with the Community Pool.
However, there are currently two issues that need to be addressed in order for the R2E model designed by K STADIUM to proceed and operate normally.
The first is to cut 50% of the SOP currently held/delegated by our users, and the second is to adjust the allocation of 100 million KSTA inflation that is currently issued annually.
Then, we will explain why these two proposals must be passed for R2E to proceed.
SOP 50% Burning
[Rapid growth of Community Pool funds and hurdles to newcomers]
Over the last two years, the Community Pool has experienced explosive growth, attracting assets reaching 680 million KSTA, resulting in a deterioration of the Community Poolโs annual return, which has been a hurdle to entry for new participants.
In various channels we communicate with our SOs and SOMs, there have been concerns about the deterioration of Community Pool reward rates and the decrease in utilization of SOP.
These concerns led to a decline in new usersโ participation due to low returns, and only existing investors participated in the Community Pool.
Also, there were monetization methods such as Atheneswapโs Yield Farming in the K STADIUM ecosystem, but this was not attractive to new users as it was even difficult for existing users to use.
[Attract new investors by 50% SOP reduction]
While searching for a solution to the above problem, we reviewed the proposal to SOP reduction, which was previously mentioned in the community, and decided that it would be possible to attract new investors and could help increase the value of KSTA.
If the 50% of SOP held by existing SO and SOM is cut, it will improve the Community Poolโs reward rate, which was the biggest hurdle for new investors.
New investors will have the opportunity to acquire more voting power than existing users, and the coordination with R2E will increase the demand for KSTA, eventually leading to an increase in the value of KSTA.
[New opportunities for existing investors via 50% SOP reduction]
We understand that many SOs and SOMs are concerned about the value of KSTA.
Currently, one of the biggest challenges to KSTAโs value growth is the stagnant influx of new users.
K STADIUM team believes that KSTAโs value will increase naturally if there is a good composition of existing users contributing to the ecosystem, R2E, and new user inflow.
We are aware that SO SOM users will feel uncomfortable with the idea of reducing their current SOP, as they believe that their assets will be reduced.
However, as mentioned above, if there is no influx of new users in the ecosystem, the KSTA value increase will undergo a tough period.
For the future of the ecosystem, we would like to say that creating an environment where new users can be active and gain more worth will lead to one of the ways to gain greater benefits later time.
Moreover, as previously mentioned, active users within K STADIUM are also important, and we will continue to improve and develop all services, including K STADIUM R2E, so that our active users can be further rewarded.
We also value the contributions of the ecosystem, and will ensure that K STADIUM rewards cannot be earned without continued activity and contribution.
With this 50% reduction in SOP, we expect to bring more rewards to active users by separating active users from inactive users.
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Additionally, there will be no change to your current Voting Power after the reduction, allowing you to be in the same place as new participants and have the opportunity to earn more Voting Power than inactive users.
This will create an environment for new participants, but it will also create an environment for existing active users.
Without further development, what we hope to achieve with this proposal is to give active users the opportunity to earn more rewards for their retained Voting Power.
We believe that this is the beginning of a systemic structural improvement that will allow active users to be rewarded more, and that the rewards for active users will be the beginning of a revaluation of the value of KSTA.
To wrap up, the most significant aspect we expect is that existing users will be in a better position.
We believe that existing users will have a first-mover advantage over new users through various uses of KSTA, in addition to the increase in demand for KSTA through the influx of new investors.
Inflation Allocation Adjustment
[Securing R2E resources and adjusting the inflation]
The currently planned K STADIUM R2E is designed to give KSTA as a referral reward.
After we decided on KSTA as the resource for R2E, two main factors were the biggest challenges: reward source and the KSTA value defense.
If the rewards are funded from the foundation resource, it is easy to secure financial resources, but in the end, we concluded that it would be difficult for value to increase due to the increase in KSTA circulating supply.
As a result, we came to the conclusion that the solution to secure funding for R2E rewards without increasing KSTA circulation was to allocate funding for R2E through inflation adjustment.
[Adjustment of the Inflationary allocation ratio]
Currently, the annual inflationary allocation of KSTA is 100 million KSTA per year, distributed as follows:
- Development/Operator : Block(Validator) Reward : Community Pool = 2 : 6 : 2
For the R2E funding proposal, we would like to allocate 40 million KSTA per year to R2E funding, with 50% each from development/operator rewards and block(validator) rewards.
To summarize,
- Development/Operator : Block(Validator)Reward : R2E : CommunityPool = 1 : 3 : 4 : 2
We believe that 40 million KSTA per year will contribute significantly to the value of KSTA in the form of a decrease in KSTA circulation rather than an increase if the regular R2E structure is returned, as the design of R2E requires participants to participate in look-up, vesting, and community pools to earn rewards.
For more information, please refer to the R2E Initial Policy, which will be released together.
If the above two proposals are passed, we expect the K STADIUM team designed R2E will be able to operate normally.
In order to proceed with R2E, a game-changer for future explosive growth, we would like to ask our SO and SOM members to agree to the above two proposals by voting.
We will announce the vote next week, and we ask for your consideration of these two proposals, which are essential for the start of R2E.
The K STADIUM Team will always do our best for the K STADIUM ecosystem.
Thank you.
