Tokenomics

An overview

Kodo Exchange employs a dual-token system for its utility and governance:

• KODO — ERC-20 utility token of the protocol

• veKODO — ERC-721 governance token in the form of a tradable NFT (non-fungible token)

Liquidity providers (LPs) are rewarded with KODO tokens, distributed at the end of each epoch, which lasts 7 days.

KODO holders can choose to vote-escrow their tokens for a period ranging from 1 week to 4 years, receiving the corresponding amount of veKODO (also known as a Lock or veNFT) in exchange. The longer the vesting time, the higher the veKODO voting power obtained, with the linear conversion rule as follows:

• Lock 100 KODO for 4 years results in 100 veKODO, equating to the voting weight of 100 KODO.

• Lock 100 KODO for 1 year results in 25 veKODO, equating to the voting weight of 25 KODO.

Over time, the power of veKODO gradually diminishes. Holders can enhance their veKODO's power at any time by extending the lock period or adding more KODO tokens to their stake.

Voters with veKODO share the total trading fees from the previous epoch and all bribes from the current epoch as rewards. The distribution proportion is aligned with their voting percentage in the trading pairs. The protocol's trading fees set at 0.2% for non-stable pairs and 0.02% for stable pairs. These rates can be adjusted by the team's multisig wallet.

This structure aims to incentivize long-term participation and governance engagement within the Kodo ecosystem, aligning the interests of LPs, stakers, and voters towards the sustained growth and stability of the exchange.