**Introduction**

Hello, KOK Members.

Today, CTO of KOK Foundation will inform you the more detail about KOK Platform, especially its token economy.

First, he will briefly explain the characteristics of KOK Platform and give you the full explanation of the adjustments. For your better understanding, he will also explain formula and principle of the platform and strategy to rise the platform price through burning of KOK Token.

**Lecture**

Hi, this is Young Choe again. I like to share my understanding of KOK Platform’s token economy, especially how to mint our KOK Token and how and when to burn KOK Tokens. To understand the whole features of KOK Token economy, we need to know KOK is a platform as well as an ecosystem.

Ecosystem is something live. Usually we said something live follows S curve in the growth pattern. Surely KOK Platform has an ecosystem nature, but also has platform features as well. Platform has the characteristics of exponential growth. Such exponential growth causes monopoly. A winner takes all!

Like a huge company such as Google and Apple, they try to behave like a platform and grow exponentially. KOK Platform, we aim a fair and sharing platform enabled by blockchain and AI technology with participants. It is a very important concept and philosophy for us to become a fair and sharing platform with all stakeholders. In short, such exponential growth is unnatural. It can explode because the resource is limited, causing death eventually. A healthy system cannot grow exponentially. We want to make our KOK Platform to construct a healthy and sustainable ecosystem that grows organically. Therefore, we need to adjust this exponential growth characteristic to stable, sustainable, healthy, and fair mechanism.

As I said, many growth shows these S patterns. An ecosystem can be represented as a big summation of many S curves. We called this ecosystem’s growth characteristics curve. By considering many reasons and philosophy through the discussion of founder, KOK Platform tries to fit our growth characteristics curve in this way. Something grows rapidly at the beginning then converges to the certain equilibrium. It is shown in terms of the circulating KOK Tokens. There are many ways to show our philosophy or the growth. However, in terms of circulating KOK Token, we fitted our characteristic curve to this way. Theoretical maximum amount of KOK Token is 5 billion. Our platform is designed to grow quickly with more participants to the platform for faster growing and expansion. We try to set the amount of circulating KOK Tokens to follow this characteristics curve and then converge to certain number, which is 1.5 billion KOK Token. All equation and formula inside the token economy are to follow our behavior including mining, expanding user basis, and KOK platform price. All those behaviors are to follow this characteristics curve.

There are two knobs that control our KOK Platform price – mining rate and burning. First one is a controlling mint(mining) rate. Second knob is burning KOK Token. Let’s me talk about the first knob, mint rate. By the way I use mint and mining interchangeably. If we allow mint rate, it will grow exponentially. It shows an exponential function of time t with coefficient r. Mining rate is r. and t is time. R is more like an approximated rate. Mining rate varies depending on the staking amount. Let me approximate the different mint rates to one variable. This is the total amount of mint over a period of time. The bigger r, the steeper exponential curve.

On the contrary, the smaller value of r shows the gentler exponential curve. We will adjust the value of r to make the actual circulating amount close to the characteristic curve. The value of r is calculated by the total amount of staking, the number of participants, the cumulative mining amount, and the consumption amount. When the ecosystem is activated and the mining amount is above the characteristic curve, the value of r will be reduced. On the other hand, when there is a limit to liquidity supply due to the slow expansion, the value of r will be increased to facilitate the circulation of KOK Tokens. The halving, which is expected for the end of May, is also a process that will be adjusted by this calculation. Moreover, this adjustment contributes to the increase in the value of KOK by controlling the volume of KOK circulation. This mining rate is the first knob that controls the total amount of circulating KOK Tokens.

I will talk about second knob, so called burning. We have an in-house token economy mathematician. We have worked intensively and simulated to develop token price and mining rate decision algorithm. In summary, we use Alpha-Beta Pruning, that’s more like MinMax algorithm. It will guide to get the platform price with S_min and S_max. Let me describe the formula. m’ is the total accumulated number of KOK Tokens. Staked amount t, time is r – the mint rate. It is summation of vector multiplication.