Question 1

What is KDK?

Accepted Answer

KDK is Kodiak Finance’s native protocol token issued on Berachain and is also a transferable ERC-20 token. It carries the governance and utility functions defined by the protocol code; it is not another name for xKDK. KDK has a maximum supply of 100,000,000 tokens; the officially recorded token generation event occurred on Berachain on December 23, 2025. Maximum supply describes the total cap set by the protocol and cannot be directly equated with circulating supply at a given time.

Question 2

What is the difference between KDK and xKDK?

Accepted Answer

KDK and xKDK are tokens with different uses and transferability. KDK is transferable; xKDK is a non-transferable custodial governance token mainly used when allocated to the protocol’s Utility Modules in exchange for corresponding benefits. Therefore, holding KDK does not automatically mean a user has received xKDK module benefits; holding xKDK also does not mean it can be freely transferred like KDK. The key distinction is between a transferable protocol token and a non-transferable credential for participating in protocol mechanisms.

Question 3

How can xKDK be obtained and used?

Accepted Answer

xKDK can be obtained by interacting with the Kodiak protocol or by converting KDK directly. After obtaining it, users must deposit xKDK into the token contract and allocate the deposited amount to a designated Utility Module before entering that module’s participation path. These two stages address obtaining xKDK and using xKDK, respectively. Direct conversion does not mean it has already been staked or has earned rewards; the specific benefits depend on whether the user completes allocation and on the rules of the selected module.

Question 4

How are xKDK staking rewards formed and distributed?

Accepted Answer

xKDK stakers can receive protocol rewards through a mechanism that runs in periods. Each period lasts 3 days, and users may stake during an active period; rewards continuously accrue according to the amount of xKDK staked, so the size of a user’s share during the same period affects the proportion they may receive. The reward pool includes forfeited KDK generated by conversions with shorter vesting periods, as well as xKDK penalties from deallocation or unstaking from the Staking Rewards Utility Module; the pool is distributed according to each staker’s share. The official documentation also states that protocol rewards may be paid in multiple tokens, so users should not assume all rewards must be the same asset.

Question 5

Why are xKDK rewards not fixed returns?

Accepted Answer

Within a 3-day reward period, the share a user may receive depends on the proportion of their staked xKDK relative to other participating stakes during that period; if the user joins midway through the period, the actual accrual time is also shorter. In conceptual formula form, distributable rewards are approximately equal to the reward pool multiplied by the proportion of the user’s staking weight over each period of time to total staking weight. This relationship explains why rewards are not a fixed rate: the size of the reward pool, other users’ staked amounts, and the time a user enters the period can all change the result. This formula only describes allocation logic and does not represent a commitment of future returns.

Question 6

How does xKDK participate in governance?

Accepted Answer

Once the protocol reaches sufficient decentralization, staked xKDK may be used to participate in Kodiak Protocol governance. This condition is important: the official documentation links governance participation to “sufficient decentralization,” so it should not be stated that all holdings or all points in time have the same voting ability. Governance allows participants who meet the mechanism’s conditions to express views on protocol matters; it differs from KDK’s transferability and from reward settlement in reward modules. Whether an address actually participates in governance also depends on whether its xKDK is staked under the rules and whether the governance mechanism is open.

Question 7

What is the relationship between xKDK and perpetual trading fees?

Accepted Answer

Users of Kodiak perpetual trading products who stake xKDK may also be eligible for VIP fee discounts. This mechanism applies to perpetual trading users and cannot be generalized to mean that all KDK or xKDK holders automatically receive trading-fee reductions. Discount eligibility is conditional on xKDK being staked, while actual discount tiers and application rules are determined by the applicable VIP mechanism. It can coexist with reward-pool distributions, but it belongs to a different utility module.

Question 8

Why should the vesting period be considered when converting KDK to xKDK?

Accepted Answer

After converting KDK into xKDK, users receive a non-transferable custodial token and its path for module participation, rather than a freely transferable copy of the same asset. xKDK is designed to bind protocol interaction, allocation, and benefits within the protocol. The official reward mechanism states that conversions shorter than the longest vesting period generate forfeited KDK that is injected into the reward pool. This shows that the conversion duration affects asset treatment; users should confirm the vesting period and corresponding consequences of the chosen conversion path before acting.

Question 9

What is the impact of deallocating or unstaking xKDK?

Accepted Answer

Deallocating from, or unstaking within, the Staking Rewards Utility Module may result in xKDK penalties; these penalties enter the reward pool rather than disappearing as unrelated fees. This design links the cost of exiting early or adjusting an allocation to the source of rewards for participants who remain in the module. Therefore, users cannot view “unstaking” solely as a status change without economic consequences. Whether penalties apply, and their conditions and amount, should be determined by the rules of the module the user actually selects.

Question 10

Why does Kodiak distinguish between transferable KDK and non-transferable xKDK?

Accepted Answer

KDK’s core positioning is as the protocol-native, transferable utility and governance token; xKDK is a non-transferable custodial governance token designed for Utility Module participation. The former can be transferred as an ERC-20 on Berachain, while the latter connects participation eligibility to an in-protocol state. This dual-token arrangement does not mean xKDK is a second independently tradable market asset. It primarily represents a participation state that has entered protocol mechanisms, while rewards, governance, and perpetual trading discounts occur under their respective rules and conditions.

Question 11

What stages are required to participate in xKDK protocol rewards?

Accepted Answer

The basic process for participating in rewards is: first obtain xKDK, then stake it and allocate it to the Staking Rewards Utility Module; during an active period, the system continuously accrues the user’s eligible share according to staking weight, and the reward pool is then distributed under the rules. No stage can be omitted, because merely holding KDK, merely holding xKDK, or merely completing a deposit does not necessarily mean the user is in a reward-earning state. The period is set to 3 days and allows users to join while it is active. This means the timing of an action affects accrual weight for that period; after staking, users should still note the potential effects of module rules when deallocating or unstaking.

Question 12

Which layers should be distinguished when understanding the KDK mechanism?

Accepted Answer

When evaluating KDK, three layers of facts should be considered separately: KDK’s supply cap and transferability, xKDK’s acquisition and non-transferability, and the participation conditions and reward sources of each Utility Module. Conflating these layers can lead to reading maximum supply as circulating supply, or holding a token as already obtaining module benefits. Protocol use, conversion choices, staked amount, other participants’ total staked amount, and module rules may all affect the utility or rewards a user actually encounters; these factors do not automatically determine a token-price outcome.

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