05·3 min read
economicstokenomics
The $KIRITE token is the economic backbone of the protocol. It aligns incentives between users, liquidity providers, and the protocol itself to ensure sustainable privacy guarantees.
token utility
| function | mechanism |
|---|---|
| privacy fees | 0.1% fee on private transfers, paid in the transferred token. A portion is used to buy and burn $KIRITE. |
| pool liquidity incentives | shield pool depositors earn $KIRITE rewards proportional to deposit size and lock duration. |
| governance | $KIRITE holders vote on protocol parameters: fee rates, supported tokens, minimum anonymity set sizes. |
| staking | staked $KIRITE earns a share of protocol fees, creating a revenue flywheel. |
fee distribution
40%buyback & burn
30%pool rewards
20%staker rewards
10%treasury
private transfer fee: 0.1% of transferred amount
fee breakdown:
40% → $KIRITE buyback & burn (deflationary)
30% → shield pool liquidity rewards
20% → staker rewards
10% → protocol treasuryflywheel mechanics
1users make private transfers
↓
20.1% fee collected per transaction
↓
40% burnsupply decreases → value increases
30% rewardslarger pool → better privacy
↓
∞more users attracted → cycle repeats
The flywheel is self-reinforcing: more usage → more fees → more burns + rewards → higher token value + better privacy → more users → more usage.
privacy incentive alignment
The critical insight is that privacy quality improves with usage. Larger anonymity sets = better privacy = more users = larger sets. The token economics reinforce this positive loop:
- Depositors are rewarded — providing liquidity to the Shield Pool earns $KIRITE. This incentivizes the anonymity set to grow.
- Longer locks earn more — deposits locked for longer periods receive higher rewards, improving timing-based privacy.
- Fees create scarcity — the buyback-and-burn mechanism creates sustained deflationary pressure proportional to protocol usage.
- Governance aligns stakeholders — token holders directly benefit from a well-tuned protocol, incentivizing responsible parameter choices.
governance parameters
The following parameters are controlled by $KIRITE governance:
| parameter | current value | range |
|---|---|---|
| transfer fee rate | 0.1% | 0.01% — 0.5% |
| minimum anonymity set size | 10 | 5 — 100 |
| base time-lock duration | 1 hour | 15 min — 24 hours |
| supported token whitelist | SOL, USDC, USDT | governance vote |
| buyback-burn ratio | 40% | 20% — 60% |
note
Token distribution details and vesting schedules will be published before the token generation event. The protocol prioritizes fair distribution with no VC allocation.