KyberNetwork’s Token Sale Terms Overview

Use of token, total cap and use of funds

Abstract

Token distribution: 61.06% for the public; 19.47% for company; 19.47% for founders, advisors and early investors

Amount to raise: 200,000 ETH

Use of funds: 50% for the first reserve; 30% for development; 10% for the legal/ marketing; 10% for operation

KNC will be tradable 1 week after the token sale (September 24, 2017)

Use of KNC tokens: As a platform currency, used predominantly by reserve managers to pay for platform fees, and for KyberNetwork to reward parties or partners that channel traffic and generate volume to KyberNetwork. The collected fees will be burned.

Dear Kyberians,

It has been a very exciting time for us. Our whitelist collection period concluded a few days ago with almost 50,000 entries. While the exact number of people who are eligible for our public token sale is still yet to be known, as we require all whitelist members to go through a strict KYC process, this number shows a massive interest toward KyberNetwork from the community. In this post, we will elaborate the previously undisclosed token sale information, namely the utility of KyberNetwork Crystal (KNC), the allocation and the distribution of the token. Also mentioned in an earlier post, there will be a mandatory KYC check on all applicants, and prior to registration, applicants will be asked to read and accept the terms of our token sale.

Use of KNC token

KyberNetwork Crystal (KNC) tokens are required for reserves to participate in the network and to reward parties that direct traffic and multiply trading activities on the platform. Knowing the importance of partnerships to scale and improve platform adoption in the blockchain ecosystem, KyberNetwork will collaborate with various organizations, including both software and hardware wallets, blockchain explorers, and on-chain smart contracts to direct users to the platform. As a reward for their efforts, these partners will be paid in KNC for every trade that they introduce to KyberNetwork.

Before operating, KyberNetwork reserves need to pre-purchase and store KNC tokens. In every trade, a small fraction (exact numbers are TBD) of the trade volume will be paid by the reserve to KyberNetwork platform in KNC. This small fee represents the reserve’s payment to KyberNetwork, in return for the right to operate and earn profits from trading activities in KyberNetwork. The collected KNC tokens from the fees, after paying the supporting partners, will be burned, i.e. taken out of circulation and cease to exist forever. In order to determine the network fees, the conversion rate between KNC and ETH will be updated frequently to the Kyber contract by KNC operators, based on the trading rates on various exchanges.

As an example, for a trade volume of 10 ETH with a 0.01% fee, a corresponding 0.001 ETH worth of KNC will be paid by the chosen reserve to KyberNetwork as a fee for the use of the reserve dashboard and access to network users. Suppose the rate of KNC at the trading time is 1 KNC for 0.1 ETH, the reserve needs to pay 0.01 KNC to the Kyber platform. The wallet/ website that helped the user initiate the trade will get, supposedly, 5% of the fees, or 0.0005 KNC. The remaining 95% of the fees, or 0.0095 KNC will be burned and cease to exist in the entire ecosystem.

With this approach, should the adoption of KyberNetwork increases in the future, the demand of the token will likely increase as well. Additionally, this approach also properly rewards all participants who help grow the network. KNC token holders can easily track the total supply by reading from the contract, without relying on any off-chain accounting firm.

Token distribution and fund raising

A maximum amount of 226,000,000* KyberNetwork Crystal tokens (KNC) will be minted. The token distribution will be shown as below:

19.47% for the company

19.47% for founders, advisors and seed investors

No more than 61.06% for the public from our private sale and public sale. The unsold tokens will be burned.

The tokens for founders and advisors (around 15% of the total tokens) will be fully vested in 2 years, with a one year lock-up period.

*UPDATE: For burning of excess tokens, please read this post.

KNC Token’s Distribution

Fund raising

We are raising 200,000 ETH from our token sale. Among the 200,000 ETH amount, about half the amount had already been raised from a private round. Participants in the private round are our strategic partners, well known organizations and reputable venture capitalists in the industries that have committed to help develop the platform. These commitments may include being a reserve owner/manager to provide liquidity within KyberNetwork, introduce potential third party reserves from other ICO projects, and connect KyberNetwork to many other partners that can promote the adoption of KyberNetwork in the cryptocurrency ecosystem.

The remaining ETH will be distributed in our public token sale with the rate of 1 ETH for 600 KNC.

Use of funds

KyberNetwork intends to use the proceeds of the Token Sale as follows:

50% to a reserve to be managed by KyberNetwork as a reserve operator.

30% for the development and maintenance of the platform service.

10% for the operation of and other costs related to maintaining KyberNetwork.

10% for marketing and legal costs.

It is critical to have and maintain our own reserve in KyberNetwork as it guarantees the liquidity of the platform prior to the participation of third party reserves. Our plan is to first support the popular tokens like OMG, GNT, GNO and REP and a few others. At a later stage when cross chain protocols become more established, we plan to tokenize other cryptocurrencies (for example Bitcoin, Zcash etc.) on Ethereum to enable trades between ERC20 tokens and different coins. To be able to execute this component, a large initial capital is required in order to provide reasonable liquidity and trading volume. Hence the need for a reserve of 100, 000 ETH.

Use of funds in KyberNetwork

What’s next: Tutorial and details about KYC (Know Your Customer) check in our Token Sale Registration. We will also explain how we handle and keep your KYC data as secure as possible. Please stay tuned!

[Warning Message]

We will NEVER send you any Emails, Direct Messages or Reminders in regards to sale details, neither will we request public contributions before the token sale date on September 15.

These are the ONLY official channels affiliated with KyberNetwork:

Slack: https://slack.kyber.network/

Telegram: https://t.me/kybernetwork

Telegram (Korean): https://t.me/kyberkorea (for Korea)

Kakao Talk: https://open.kakao.com/o/gXTclzy

Medium: https://blog.kyber.network/