Tokenomics

A brief rundown on the tokenomics behind eckoDEX

KDX is eckoDEX’s utility token – a programmatic scarce resource with a limited supply of 1 billion tokens – that enables eckoDEX to enforce decentralized governance and attract LPs. eckoDAO contributors can take advantage of the large portion of allocated tokens to enhance DAO participation through grants and bounties, and to, in parallel, grow the network and swap volume.

Swap Trading Fees

When a swap is performed, the user is charged the standard 0.3% trading fee, of which 0.25% goes to LPs (Liquidity Providers), and 0.05% goes to Governance Mining participants.

Governance Mining

KDX Token holders will have the ability to stake their KDX to accrue voting power for governance participation. Token holders are incentivized for the long-term success of the network as voting power increases by a factor of locked time. A small 0.05% of swaps are spread proportionally between Governance Mining participants to incentivize participation and continual locking to accrue further voting power.

Liquidity Mining

Liquidity Mining – the process of attracting liquidity through the distribution of native KDX tokens – is at the core of eckoDEX’s success. eckoDEX technology allows users to swap instantaneously with no gas costs or additional fees. Therefore, this creates an unprecedented incentive for users to come and trade on eckoDEX. On the other hand, eckoDEX Tokenomics – with the larger portion of tokens allocated for network rewards (40%) – can generate lucrative pool boosters for early LPs.

The DEX industry has seen many projects quickly disappear after consuming all their liquidity incentives. Naturally, the end of extra incentives for LPs leads to a loss in the overall value of the DEX, as LPs will just migrate to the new and more lucrative options. This results in a difficult multivariate equation of attracting liquidity (with higher incentives) and implementing a sustainable rewards emission schedule. eckoDEX solves this multivariate equation by being both lucrative and sustainable. Lucrative for LPs with a programmatic vesting schedule to distribute extra incentives and Sustainable as users are economically driven to swap where it is free, fast and secure.