Esknine direct settlement supporting the protocol

The goal of this proposal is to transform the wrapped token eSK9nine into a stable token with a value equivalent to half of the native token K9. This will allow users to choose between an instant liquidation of their rewards with reduced purchasing power or to keep them under the current system, which enables unwrapping over 6 months to receive the full value in K9.

Additionally, the rewards saved through this system will be strategically reinvested into development and marketing, with 66% allocated to development and 33% to marketing.


Justification

Currently, users receive rewards in eSK9 and must wait 6 months to unwrap them into K9. This structure is not always ideal, as some users prefer immediate liquidity.

Introducing a stable value for eSK9 at half the price of K9 offers key advantages:

  1. Instant liquidity for users who prefer to sell their eSK9 immediately.

  2. Incentive for retention, since those who choose unwrapping will receive 100% of their rewards in K9.

  3. Optimized use of rewards, allowing part of the saved tokens to be reinvested into strengthening the project through development and marketing.


System Mechanics

  1. Stable Conversion of the eSK9 Token

eSK9 will be a stable token with a fixed value of 0.5 K9.

Users will be able to sell their eSK9 rewards immediately in secondary markets at this value.

  1. User Options

Option 1: Immediate Sale

Users can sell eSK9 instantly, obtaining 50% of the purchasing power compared to K9.

Option 2: Gradual Unwrapping (Current System)

By holding eSK9, users can unwrap it over 6 months, receiving the same amount in K9 (100% of the original value).

  1. Unwrapping Mechanism

Each eSK9 can be gradually unwrapped through a smart contract over 6 months.

Once this period is complete, the user receives 1 K9 per eSK9.

If the user sells eSK9 before this period, they will only obtain half of its value in K9.

  1. Reinvestment of Saved Rewards

A portion of the rewards generated by users who opt for immediate liquidation in eSK9 will be reinvested into strengthening the ecosystem.

66% of the saved rewards will be allocated to development (improvements in smart contracts, infrastructure, new features, etc.).

33% will be used for marketing, increasing adoption and expanding the project’s reach.


Main Challenges and Solutions

One of the biggest challenges is market volatility, which could affect the stability of eSK9. To address this, a liquidity reserve will be implemented to ensure that eSK9 maintains its 0.5 K9 value.

Another challenge is community acceptance, as some users might prefer the current structure. This will be managed through education and communication campaigns highlighting the advantages of the new system.

A third challenge is adapting the smart contract, since changes in the unwrapping logic will be required. A new smart contract will be developed and audited to ensure security and proper functionality.

Lastly, regulatory compliance must be considered, depending on jurisdiction. Legal consulting will be sought to ensure adherence to financial regulations and avoid potential restrictions.


Implementation Roadmap

The Planning and Design Phase (estimated 1-2 months) will focus on defining the structure of the new smart contract, designing liquidity strategies for eSK9, and gathering community feedback.

The Development Phase (estimated 2-3 months) will involve creating and testing the smart contract, simulating scenarios for unwrapping and immediate sales, and conducting security audits.

The Integration and Testing Phase (estimated 1-2 months) will include implementing the new system on a testnet, testing eSK9’s stability and its conversion to K9, and making adjustments if necessary.

The Official Launch Phase (estimated 1-2 months) will deploy the system on the mainnet, execute marketing strategies to communicate the changes, and monitor adoption while addressing potential issues.

The Optimization and Expansion Phase (ongoing) will evaluate the impact of the new system, enhance the infrastructure based on demand, and work on expanding adoption to more markets.


Proposal Benefits

:white_check_mark: Flexibility for users: Those who need immediate liquidity can sell eSK9 without waiting.
:white_check_mark: Incentive for retention: Holding eSK9 until unwrapping offers the full 1:1 benefit with K9.
:white_check_mark: Increased ecosystem stability: Reduces selling pressure on K9, helping to balance its price.
:white_check_mark: Improved user experience: Provides a clear and fair alternative for managing rewards.
:white_check_mark: Ecosystem sustainability: Saved rewards will be reinvested in development and marketing, ensuring the project’s long-term growth.
:white_check_mark: Transparency and security: A well-designed smart contract will guarantee fair and secure unwrapping of eSK9.


Conclusion

This proposal aims to balance the needs for liquidity, stability, and ecosystem growth, providing more options for users while optimizing reward utilization. With a clear roadmap and well-defined strategies, this implementation will significantly strengthen the project in the long run.

This system benefits the true protocol stakeholders and long-term holders,Making profits from those looking for immediate sales.

The protocol will receive esknine and must wait 6 months to be able to use it in its target areas (marketing and development)

1 Like

The current system is setup to drive the ecosystem. I believe we need to keep ESknine the same. You actually unlock daily.
My vote would be no.

3 Likes

There are configurable inputs in Bonecrusher already that could achieve similar goals without the significant development lifts. I would recommend looking at those configurations, but I love the outside of the box thinking

2 Likes

I like the out of the box thinking as well… could lead to something more substantial…

2 Likes

I like the idea but I also believe if it isn’t broke don’t fix it. I would be one who keep the same structure as is (Yes I am greedy). I also only invest money I don’t need. So waiting six months don’t bother me

But once again a good idea well done. I would probably give you a yes vote as long as the option is there to keep same structure as well

I concur.

The ESK (short for esKnine) supports K9 already in circulation and allows users to vest into ownership: giving them an avenue not yet seen before by most other staking platforms to engage with the DAO through support. I say keep esK9 the way it is.

1 Like

This seems like a ‘benefit’ for those that don’t want to be involved in the ecosystem. Not a benefit for the platform/project as a whole.

Smaller farmers would take advantage, but it doesn’t make sense for larger farmers. It doesn’t take much time to build your vest up to vest 500K KNINE a day as it is.

If you’re selling off at half the price, while only claiming say 50K esKNINE a day, 25K KNINE doesn’t have much of any value today and will take time to get to $1. How small of transactions are you wanting here? Even if the price doubled, you’re still looking at ~$1 a day if you’re claiming 1M esKNINE a day to sell at half price.

IMO, figuring out a new contract to incorporate esKNINE makes more sense then allowing the sell off for half the price of KNINE daily.

4 Likes

I agree. It benefits only short-term opportunists while generating extra selling pressure for the charts.

We should be creating incentives for people to stick around for long-term - not cut and run.

While extra source of funds for marketing is not a bad thing in theory - we already have sufficient budget which we are not utilising to the max until the market timing is right. So we have reserves to increase the marketing already without the need of creating unnecessary selling pressure on the token.

2 Likes