Behind the Scenes: The Unique Tokenomics of Konra

A unique look at behind the scenes of Konra development focusing on the unique tokenomics of Konra

When creating a token I both experimented and observed what a lot of other tokens were doing and wanted to completely go outside the mold to explore what's possible to work hand in hand for fulfilling the goals of Konra.

There were a few things I tried, all on the path of inventing the best tokenomics for Konra. While most things of Konra's development consists of trade secrets there's a few things I can talk about.

One of the most interesting topics is Konra's unique tokenomics.

I'm hoping that by this article you'll see just how much goes into the tokenomics of a new project and why how a project sets up their tokenomics is of utmost importance. And here I'm not just talking about initial supply, but also on how you distribute it and a few other things you have keep in mind.

Forget the pretty charts and pie graphs.

In fact, most of a projects early development should go to this beginning phase as ideally their tokenomics must be tailored to the specific project and it's goals. Too many projects don't spend enough focus nor time in this area in the first few months and if they don't take enough time with it you could fail or not thrive as well as you could.

I have a feeling Konra thrived beyond all expectations only because I spent a lot of time and effort not only on creating Konra's unique tokenomics but also navigating the hurdles associated with this particular situation.

Makes me wonder if not doing this right is a big reason behind project failure....

First Step: Overcoming the problem with all new token projects:

When Konra was first created I knew the community would be small. With a small community it's almost impossible to decentralize it sufficiently while simultaneously instilling into people's minds that Konra had inherent value. You usually get one or the other; but for Konra to work best I needed both from the very beginning.

I knew my immediate problem needing to be solved would be that the supply would be much higher than the demand. By minting millions of tokens at the Genesis it takes a long time to equalize demand and supply. For most projects this works absolutely wonderfully, but for Konra it wouldn't.

With an initial supply of millions the results on the market side would have resulted in a low token price and needing a long time for supporters to see positive results from Konra. That wouldn't work as well as an incentive for onboarding new people into Bitcoin Cash and it would stall development at key points preventing some of the more ambitious future endeavors. Had I minted millions of tokens it also meant my unique airdrop style wouldn't be possible; leaving Konra too centralized in the process. I had been through this as I tried the traditional tokenomics with the SLP version of Konra. Let's just say it really didn't work so well as it was impossible to decentralize when the Dev wallet had 99% of the supply.

So I thought why not go the other way; try something so different that potentially be the only thing that would work for Konra. It would raise eyebrows too, but what doesn't in crypto.

>> Mint Low at Genesis, very very low.

That was a great beginning, but I knew this would only be the first step. With a very low supply token the demand versus supply problem gets solved rather quickly but another few problems take it's place almost immediately after launch.

It's quite difficult to scale up from a low supply token if you make any mistakes and almost impossible to do things like presales and ICO's. In addition boosting liquidity gets interesting too if you do anything wrong after minting a low supply.

Most people won't understand this aspect until they see it in action -- let's just say if you don't do everything completely right you'll fail as it's like threading a needle while jumping out of an airplane. That's not an exaggeration either and this article barely covers the tip of the iceberg of just how many things must align properly to make it work. I've seen several projects struggle with various aspects of this, as having a low supply builds a quick wall that the project has to overcome very quickly in order to thrive.

That's why for most token projects it's still the best idea to do traditional minting so they have time to get everything situated before demand meets supply and so that a simple seeming mistake doesn't throw the whole project into a loop.

This is also why I'm not particularly concerned with copy cat tokens trying to steal Konra's tokenomics. You need to literally do about a dozen things simultaneously at the very beginning in order to do this properly and need a good dose of luck to boot.

I almost messed this up myself as I didn't know this would happen when I first created Konra and I still have a few problems since I didn't do this perfectly.

For instance one of my tiny first mistakes was caused because I didn't have a functional bridge when I created Konra and thus had to have all BCH bridged manually by someone I knew in the community.

As such I didn't have a lot of BCH on the SmartChain when I first launched Konra. I knew I needed to invest in token projects, add initial liquidity and keep a significant amount for sending the first airdrops. All from the same meager bucket of BCH I had on SmartBCH. As such I only added a little liquidity. A week later when I finally had BCH available from earning it from the investments and finding the wagon cash bridge the price of Konra had already shot upwards. It now turned out to be quite expensive to add a lot of liquidity to Konra or to create new pools. Obviously I can't go back and fix it, I can only move forward and adapt. Rather than adding liquidity at will I have to be like any Community member and wait for opportune moments of dips in Konra to add liquidity. And this one thing was the repercussions of just making a tiny mistake.

Mistakes and missteps aside minting by this unique tokenomics was the best move I ever did for Konra. But in retrospect this may have only worked for Konra as my natural skill helped Konra overcome the hurdles and the stars aligned just right at the same time. I know now that the chances of actually replicating this in another project slim enough that even if I consult someone I won't recommend them taking this crazy path as it's inherently risky and can lead to project failure or stalling in the first few weeks if not done exactly right.

2nd Step: Decentralizing Konra for a strong foundation:

As Konra was just a few hours old I immediately began decentralizing Konra as that was the sole reason I took this crazy step in the first place. Again, most projects do this by an initial airdrop, pre-sale or both. It's basically a one time sending some of their tokens to the initial people who show interest in the project.

While I loved the airdrop idea I knew doing just one drop at the beginning wouldn't work with the long term plans for the project. Somehow I had to navigate through multiple airdrops over a period of time. I needed to both simulate mining without expensive computer equipment and allowing each minting to shard into multiple pieces to dozens if not hundreds of people. Yet at Genesis only 100 Konra tokens were minted and I knew that airdropping fragments of Konra wouldn't work that early. After all Konra had no value yet; in the first few days.

So I sent a whole Konra token to lots of people to simulate the effect of shard - mining and shoved some of the initial supply into liquidity even though Konra wasn't listed anywhere. All trades had to happen manually; so this of course would prove interesting too. Would people even trade a token they knew almost nothing about and where development would take time?

I literally prayed that this wouldn't bite me later.

First because I knew that I was giving a lot of tokens that would soon have quite a bit of value; and secondly because people would know relatively quickly that it was valuable from a market standpoint. If too many people of the initial supporters all sold at the wrong time it would crater the price and at a value of over 5 dollars per Konra almost from the second week of existence the temptation would always be there to sell. On the flip side if too many people bought a large amount of Konra at the beginning it would create too many whales. The barrier of entry to become a whale in the first week was just a few dollars and I knew the whole thing would happen quick enough that enough people would notice this to take action on it. I went through this expensive and work intensive manual process of sharding the Konra supply. I didn't want to fail due to whales making splashes at the wrong time or dozens of people selling their Konra at once. Konra remained relatively low in price in the first week and the suddenly shot up in value in the second week and all this happened while SmartBCH was still in infancy.

In retrospect it was utterly crazy to create a token without having access to a stable and reliable bridge to SmartBCH but then again I had entered the crypto world by trial of fire after the bull run of 2017 and I was more than used to doing crazy things at the worst times.

Second I feared my brilliant idea would back fire on me in the first month because development would take time and a lot of the places I relied on were untested and unproven. Had the initial DEX's failed I would have lost everything; even after EROS and BeachSwap rug pulled I had lost enough from my personal trading that I used to bankroll the project that it set Konra development back a notch.

In addition with so much focus on decentralization and navigating tokenomics I knew I'd have almost no time for anything else in the beginning. After all I'm still to this day working a day job and decentralization if done right takes a lot of time and effort. To show you what I mean, I'm still airdropping Konra even now and I'll have to continue airdropping Konra for quite some time.

That's because each minting simulates a mining reward and I have to manually send the shards (or pieces of Konra) to people in the community so Konra would be effectively owned by all of us.

Thirdly I was worried that I also wouldn't have much of a development budget at the beginning as a good bit of my own money is tied up into Konra and none of it could be sold or taken out of liquidity for a year (or even more). Building trust takes time and a serious amount of sacrifice; that and Konra is a very long term project. Good thing the transaction fees of Bitcoin Cash and SmartBCH are cheap enough I can bankroll most of it myself as long as I do things in small steps. Also it's good that I'm a pretty decent trader and can make profit through investing and holding tokens of other projects to tide me over letting me cut my work hours and give me a bit of money to put into Konra over time.

I knew the market would have to sustain Konra for all this time while I slowly planned out, tested and developed everything else. In addition I know I will eventually need to hire help or collaborate with others as I scale the project up incrementally. I'm brilliant in a lot of ways, but lack it in other things.

When I did the initial airdrop I was hoping for the best and what happened next took me completely by surprise. People began trading Konra. Even though SmartBCH was new and we weren't officially listed anywhere, all of these trades had to be done manually. Yet trading happened, and in large enough volume which resulted in the price quickly rising. Some sold, others bought and still others added their airdropped Konra to the liquidity pools. We ended up with a couple of whales but not too many of them. The trading activity of the initial community was exactly what was needed to get Konra over the humps and it all balanced perfectly. This is why I mentioned that a fair amount of luck was involved in navigating the unique tokenomics model of Konra and why I don't think it could be replicated.

With the foundation set I had to now focus on the next aspect to make Konra thrive on the long term. Which brings me to the third step....

Third Step: Slow, low amount, sharded additional Mintings:

I knew if I wanted to scale up I would have to slowly mint more Konra in small quantities to scale up and this required a large amount of trust of the community that was vested in Konra. There was nothing I could do about this except to just hope that my actions over time showed that I was trustworthy.

Since most token supplies are fixed at the beginning Konra again broke the mold of the expected with this unique style of additional mintings.

Why the mintings you may wonder?

This was done in hopes of providing equality of access to Konra for as many people as possible over a sustained timeframe. How many people missed out on LawPunks and that famous CashCat's airdrop just because they weren't in the right place at the right time? I didn't want this to happen to people with Konra. As such mintings are done incrementally, but they're done slowly to assure that supply and demand remain relatively balanced. Konra should if this is done right move primarily on an upward trajectory; but do so gradually enough that new people don't get priced out of participation.

Slow minting and distribution also helps with continuously increasing community size in an organic fashion. This allows us to grow without having to rely on hype nor on celebrity endorsements. Later on if this model is kept and perfected it won't matter if governments and large businesses don't support Konra. After all if enough people get their hands on Konra they can use it as they see fit. Distributing these mintings manually may seem cumbersome but allows me to decentralize Konra better than a computer program could.

Since all mintings are manually sharded and distributed, each time more new people enter the community it will continuedly grow. At first they'll come primarily from the Bitcoin Cash community but as time goes on and Konra increases in value it'll reach more and more people who have never been in Crypto. Furthermore seeing the uniqueness of Konra and learning about it's history or looking at the market charts will convince anyone new to Crypto to overcome the barriers to learning how to handle their new found valuable token.

I created this unique tokenomics as I simply wanted a token that was:

- already decentralized in the beginning

- growing more decentralized the longer it existed

- gaining good initial value

- increasing in value steadily over time

- resisting whale movements and market manipulation

- growing the supply slowly over time as if it were mined

- spreading each new minting to many people via sharding and distribution

- growing the community of supporters organically without hype

- launching and initially sustaining itself without a presale or ICO

- increasing the actual use of SmartBCH and Bitcoin Cash

- appealing enough to people to bring them into SmartBCH

No small order to be sure and Konra only succeeded in these things because of the unique customized tokenomics I created and implemented for it. All of the things above will greatly benefit Bitcoin Cash, SmartBCH and all projects within it as it fulfills the ultimate goal of Konra: to improve lives.

So there you have it. Some of my reasonings and some behind the scenes look at Konra's tokenomics and why I do the crazy things I do.