Tallinn, Estonia–(Newsfile Corp. – August 10, 2021) – In early June, the KickEX cryptocurrency exchange launched a hyper-deflationary reverse split model or, as it called in cryptoworld, “hyper-deflationary tokenomy.” This model makes it so that the KICK token’s value continuously increases by permanently decreasing the coins in circulation. The idea is still very new and innovative in crypto so very few have done it so far. Notably, there are no exchange token or deflationary model built-in, KICK is the first of its kind and should be outlined here. Its implementation has opened up new opportunities for KICK v8 “hodlers” and traders. Below, we’ll take a look at how the exchange manages to raise the value of its token without injecting any cash.
The Kick Ecosystem and why you should know about it
The Kick Ecosystem is a new blockchain ecosystem that helps both beginners and crypto professionals generate a stable income from digital coin transactions. Several basic modules are included within this ecosystem:
KickEX, a crypto exchange that operates as a spot market, but will soon add the ability to trade cryptocurrency derivatives: futures and options; with super-friendly 24/7 live support, lightning speed KYC and orders to keep users safe, such as trailing stop-loss orders;
KickICO, a fundraising platform for startups that introduces a totally new tokensale model – AIO, based on daily auctions and totally transparent process;
Kick Academy which is being prepared for the launch, with webinars, video courses, and a lot of useful information for newbies and experts;
Proprietary cryptocurrencies – KICK token and KUSD, which are used both as internal means of payment and for trading;
The KickRef referral system allows even those who know nothing about trading to earn some money with the help of cryptocurrency;
An iOS and Android mobile app to be released this summer. This app will not only incorporate all of the above-mentioned ecosystem modules but will also add many mobile-specific tools, such as NFC payment in offline stores in the future;
B2B solutions – whitelabel of KickID + KYC, KickRef, KickEX whitelabel broker.
Kick Ecosystem uses its own in-house KICK token, which recently got a new lease on life after swapping and burning off excess supply, becoming deflationary token, KICK v8.
So how does the deflationary model work and why is it important for traders, KICK token holders, and platform users to know about it?
95% of the entire token supply was destroyed by the exchange
In June 2021, KickEX burned more than 85% of its liquid KICK token pool, worth more than $322 million, thereby reducing the number of overall tokens in circulation. Of the tokens currently in circulation, the following sources saw tokens being burned: the company pool, commission tokens, unused pool tokens, and a small number of frozen tokens. The total number of KICK tokens is now not 2.2 trillion, as it was before the burn, but 1.2 trillion, which includes the frozen pools. Of these tokens, only 125 billion are liquid, which means that the volume of circulating funds has dropped by 85%. The next step was to liquidate all the remaining tokens that were out of circulation as part of the swap. The remaining trillion frozen tokens were thus abandoned and left behind on July 1, when the old smart contract was replaced with the new one. These tokens were simply not transferred over, thus effectively destroyed.
Built-in into new smart-contract burning of tokens allows holders to increase their share of token ownership. This benefits primarily those who are HODLing KICK tokens.
By analyzing the historical data of the KICK token from January 1 to June 14, 2021, we can roughly estimate what KICK token holders will receive thanks to staking being built into the token contract.
Let’s look at an example.
“Transactions of KICK since 1st Jan 2021 till 14th Ju 2021: 167,149,494,283 KICK, equals to $50,144,848 by the current price. 6 months would generate: 5% burn: 8,357,474,714 ($2,507,242 burned) and 5% staking redistribution: 8,357,474,714, ($2,507,242 sent to holders of KICK). If you would hold KICK in amounts: 10% of emission, in 6 months your staking would provide $250,7k, 1% of emission: $25,700, 0.1% of emission: $2,570. Burning of 5% per transaction would decrease the total emission of KICK by 5,6% in just six months.
So, if you had 1% of emission, now you would have 1,06%. Add staking and your it becomes 1.12% in six months, snowballing. Extrapolate it to one year, and imagine that the value of KICK will rise: no more big dumps because whales would hold for staking, the deficit starts here. But even if someone dumps, 5% redistributes, 5% burns. Cycle restarts,” explains Anti Danilevski.
What happened to the KICK v8 token after the swap
Essentially, running the swap finalized the destruction of excess KICK tokens, reducing the total amount of tokens to 1.5 billion, and launched a hyper-deflationary model that opened up new opportunities for KICK v8 token holders. Here are just a few of them.
Staking. When the smart contract was replaced, a transition to the Proof-of-Stake protocol was made, which triggered the staking process. KICK token holders will receive a percentage of each KICK token transaction made by someone on the blockchain according to their share of token ownership. In other words, the more KICK tokens a user owns, the greater the percentage of tokens distributed each minute they will receive. In the first phase, 5% of the amount of tokens sent will be distributed from each transaction. This percentage may change later, but cannot be reduced by less than 0.5%, ensuring that holders receive redistributed tokens for life.
Built-in token burning – a gradual increase in token ownership. Permanently burning tokens at up to 5% of the transaction amount allows for a gradual increase in the ownership share of KICK v8 among holders of the coin. Let’s look at how this works using an example. Let’s imagine that we have a total supply of only 10,000 tokens. Holder A has 1,000 tokens, and the remaining 9,000 are owned by other users. This means that Holder A owns 10% of the total supply. Now let’s imagine that there were transactions totaling 5 thousand tokens in 24 hours. 5% of them were burned, which means 250 tokens were burned. The total supply is now 9,750 tokens, and Holder A’s share is no longer 10%, but 10.25%.
“Burning 5% per transaction will presumably reduce the total supply of KICK v8 tokens by 5.6% in just six months. That means if you had 1% of the total supply, this number would now be 1.06%. Add in the staking, and after six months your share increases to 1.12%. The bottom line is that users pay a 10% fee for token transfers, which would seem like a lot, yet at the same time, they all participate in the distribution of the 5% that is charged on every transaction on the blockchain. This makes holding tokens more advantageous and selling them much less appealing, and this is great news for everyone, as it forms a constant deficit and has a positive impact on the demand for the token, and therefore on its value,” explains Anti Danilevski.
In the first two days of the swap, 1 million tokens were burned. the same amount of tokens was divided between the holders, which is $ 50 thousand
Demand generation. These previous two points will inevitably lead to lots more long-term token holders and more buyers, while the inflow of tokens for sale will decrease as they will be held in order to generate distributable tokens. The constant burning will reduce the overall supply, thereby forming a natural shortage in the market. This will inevitably lead to the value and demand for tokens to increase.
Token popularization among holders. Since the burn rate of KICK v8 tokens directly depends on transaction volume, holders themselves will be interested in increasing the number of transactions they make. This will motivate “holders” to use tokens in their everyday lives, both to pay for services within the Kick Ecosystem and to pay commissions on the KickEX exchange.
The popularity and value of the token, meanwhile, will further increase among users with the launch of the Kick Superapp and other ecosystem products where KICK will be a means of payment.
With the introduction of the hyper-deflationary model, KickEX significantly increased the appeal of the KICK v8 token, made it a full-fledged domestic payment instrument, and launched a staking program for token holders. This significantly raised the token’s prestige, as well as attracted active new users and “holders” of the coin.
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