Kai Protocol (KAI) Price

KAI’s supply expansion or contraction mechanism is designed to bring its trading price close to 1 KUSDT, but this is not a fixed market price or a guarantee that KAI can be redeemed for 1 KUSDT. KAI’s actual value does not necessarily remain equal to 1 KUSDT at all times.

Kai Protocol has a one-hour round cycle. It evaluates the KAI price to determine whether a round is in an expansion or contraction state, and accordingly decides whether to increase KAI issuance or increase bKAI. The reference price (TWAP) used to determine the round’s state is a one-hour weighted average price calculated from the exchange rate of the KUSDT-KAI trading pair. The expected price (TWAP) serves a different purpose from the reference price: starting at the beginning of a round, it is a one-hour weighted average price calculated from the exchange rate of the same pair and serves as the estimated price for the next round. The reference price, by contrast, is used to determine whether the current round is in an expansion or contraction state.

Under the rules described in the January 6, 2022 update, the protocol issues additional KAI only if the base TWAP at the start of the round is above $0.995. This threshold is an issuance condition; it does not guarantee that KAI’s market price will reach or remain at any particular level. Under these rules, the amount of additional issuance equals KAI circulation multiplied by the issuance rate. KAI circulation is calculated as KAI Supply minus the KAI reserved in the Treasury. The additional KAI is distributed to participants who deposit sKAI as a single asset.

In an expansion round, additional KAI is distributed proportionally to participants who deposit sKAI. Under the distribution rules described in the October 7, 2021 update, the amount corresponding to the additional issuance limit is transferred to the Boardroom Contract for distribution; the remainder is held by the Treasury Contract to repay bKAI. Thus, KAI transferred to the Treasury Contract is not the same as the portion distributed immediately to sKAI depositors; under these rules, it is used to repay bKAI.

The following rules were described before the October 7, 2021 update: additional KAI could be minted when the TWAP-KAI (time-weighted average price) reached or exceeded 1 KUSDT. For the first 21 rounds, the additional minting limit was fixed at 3.00%; starting from round 22, the additional issuance amount was calculated as “(time-weighted average price − 1) × 30%.” The formula is stated as given in the original rule, without adding an unspecified unit or denominator. After the first 21 rounds, the additional supply limit also varied by KAI total supply: 3.00% below 1 million; 2.00% at 1 million or more; 1.50% at 2 million or more; 1.00% at 5 million or more; 0.50% at 10 million or more; 0.25% at 20 million or more; and 0.10% at 50 million or more. These tiers were part of the pre-update rules and should not be treated as current rules without a specified date.

During a contraction round, users can purchase bKAI with KAI; this mechanism is intended to encourage changes in KAI supply. The KAI used for the purchase is burned and excluded from total circulation, while bKAI is issued and distributed. This burn occurs when bKAI is purchased and is distinct from what happens later when bKAI is redeemed.

bKAI has no expiry date, and holders can request redemption for KAI at any time. On redemption, bKAI is burned and KAI held by the Treasury Contract is paid to the redeemer, increasing KAI circulation. There is an exception: a redemption request made during a contraction round incurs a 10% penalty. The stated reason is that redemption distributes additional KAI even though the round is not a period of additional supply.

During an expansion state, the protocol separately mints KAI for the buyback fund, in addition to the additional KAI issuance described for that state. This KAI is converted into KUSDT, KDAI, KUSDC, and KLAY and accumulated for use in stabilizing the KAI price. Buybacks do not follow a fixed schedule; they are conducted irregularly.

In governance, vKAI is used to propose and vote on changes to protocol parameters. In the Boost service, it serves a separate function: determining the sKAI distribution rate. These are separate functions for parameter decisions and determining the distribution rate; they do not mean that vKAI holders automatically receive protocol revenue.

10,000 vKAI are issued each round, and there is no maximum issuance limit. The issuance frequency is expressed in “per round”; the stated rules do not specify a duration for each round, so this cannot be converted into an issuance amount per day or per year.

KAI is designed as a medium of exchange within the protocol. The protocol attempts to peg it to 1 KUSDT by expanding or contracting its supply, but this does not guarantee that KAI will always equal 1 KUSDT. sKAI represents the value of Kai Protocol and can be purchased, staked in the protocol, or deposited in a liquidity pool. Its designed role also includes helping the system pursue the KAI peg through a trust mechanism. bKAI is intended to encourage changes in KAI supply during expansion and contraction rounds: during a contraction round, users can purchase bKAI with KAI, and the KAI used is burned and excluded from circulation; bKAI can later be redeemed for KAI. vKAI is used in governance and the Boost service, including proposing and voting on protocol parameter changes and determining the sKAI distribution rate. The four tokens have different roles and mechanisms, are not interchangeable, and their value is not guaranteed.

Yes. KAI, sKAI, and bKAI can all be deposited in liquidity pools. For sKAI, depositing it in a liquidity pool is different from staking it in Kai Protocol. For bKAI, depositing it in a liquidity pool is also different from purchasing it with KAI during a contraction round or later redeeming it for KAI. The stated information does not specify particular liquidity pools, returns, fees, or withdrawal conditions.