Download BitKings Token Economic Paper HERE
The legacy of 2017
Nowadays in the crypto world, terms like “ICO” (Initial Coin Offering), “utility token”, or simply “token”; seem to have gone out of fashion and even associated with scams.
This perception is not entirely wrong since only few tokens have generated value for buyers since the boom of utility tokens and ICOs during the years of 2017 and 2018. In fact, the vast majority of them have now fallen by more than -90% from their initial purchase prices and do not present enough liquidity to sell at such price, hence providing an effective return of -100%.
The accumulated losses together with the general disappointment of the ICO public have caused the ICO retail sector to be practically dead by 2020. Currently, most of them are “private sales” managed by venture capital funds, in which the participation of the crypto retail investor is prevented until the tokens are on the open market. In fact, the initial concept of ICO as a democratization of investment is in very low hours.
The questions that arise are: Have the utility tokens failed as a model of start-ups funding? Alternatively, have start-ups failed when issuing these tokens?
BitKings believes that the utility token concept is still alive, and that, in most cases, the failure is found in the start-up itself, which is not able to generate demand for its token or has poor token planning. There are many factors that influence the appreciation/depreciation of a utility token, however, the main factor for appreciation is the existence of a growing base of organic demand for a token which has a clear utility.
Organic demand is the basis that attracts speculative demand, liquidity, and the influx of new users, producing a fantastic virtuous cycle. For that reason, it should not surprise us that the most appreciated utility tokens are the ones related to successful crypto exchange businesses, which have products that people actually demand: Binance Token (BNB), Huobi Token (HT), Okex Token (OKB) or FTX Token (FTT), among others.
BitKings Token Economic Paper Introduction
The purpose of this BitKings Token Economic Paper or, in other words, “tokenomics”, is to explain its distribution over time. Specifically, the way in which a utility token is initially distributed has a direct influence on both the development of the whole project and the evolution of the token price. A balanced initial distribution allows an alignment between the interests of the token holders and project shareholders towards the same main objective: the growth of the token’s value.
The token distribution over time is also crucial and yet a common problem in existent utility token schemes. Nevertheless, this issue does not exist in the case of the classic PoW cryptocurrencies, which are being mined at a certain rate according to their protocol, and whose new supply is given to the miners. A feeling of “fairness” is attributed to these distributions of minable cryptocurrencies compared to ones of utility tokens as the miners are buying the new circulating supply of the cryptocurrency in question at a price of X. The famous $6000-8000 cost of mining a Bitcoin is a prime example of this. This process does not entail that the price of a Bitcoin will not diminish from there, although it suggests that the tendency to sell below that price is much lower than it would be, for example, if the new bitcoins had been given away to these miners, or if the cost of mining was much lower than the market price.
Introduction to the BitKings Token (BTK) in 2020
BitKings Exchange, following the example of successful exchange predecessors, creates its own token, the BitKings Token (BTK), which presents classic exchange token features together with some unique characteristics, differing from other utility tokens. These features are presented below in this BitKings Token Economic Paper.
|Full Name||BitKings Token|
|Total Suply (unincreasable)||10.000.000.000 BTK (10 billion BTK)|
The BitKings Token BTK was born with the project and its funded part of its development and launch. However, BitKings Exchange gives life to the usefulness of the BTK token and initiates the natural network thus favouring its demand along with the growth of Exchange users.
The two basic economic factors that will contribute to the success of the BitKings Token (BTK) and any other utility token will be: token usage and token distribution.
BitKings Token (BTK) Usage
The main use of the BitKings Token (BTK) is to improve users’ conditions related to the fees associated to their activity within the Exchange. Users can improve these conditions through two mechanisms: the possession of a certain amount of token and the activation of the discount button using BTK.
Possession of a certain amount of Token
Possession of a certain amount of BTK token will reduce the base commission of each transaction since the user is categorized according to that amount. This categorization includes six levels with references to marine animals, starting with a cucumber fish and ending with a whale, thus honouring the memory of the legendary crypto whales.
Activation of the discount button using BTK
The activation of the discount button using BTK is an option presented to users belonging to the Seahorse categories onwards. It is located in the trading panel and the user has to activate it every time he logs in for the following rates to apply:
When the discount button is activated, the user will be paying the commission related to his/her transaction in BTK without affecting its Total BTK balance. This is done through an automatic internal mechanism where the commission amount obtained in the base currency of the pair in question (USDT…) is used to buy BTKs in the market. The results of this are subsequently delivered to BitKings Exchange D.O.O. (70%) and the BTK Community Fund (30%). Please note BitKings Exchange may change this percentage at its own discretion.
The BTK Community Fund is a reserve of BTK Token over which only the BitKings Community has the power to decide on whether it is used, reserved or burnt every certain period of time.
Activation of discount button using BTK process
Activating the discount button using BTK is not only a mechanism to improve user conditions, but also a direct contribution to the ecosystem and the BitKings community.
The distribution of the BitKings Token (BTK)
BitKings innovates in the way it distributes the BTK Token and implements a strategy considered to have long-term benefits: distributing 95% of the BTK token supply with price as the only variable.
This condition implies that time, the main condition in the utility tokens launched until today, has no implication in the increase of the BTK token circulating supply in the market. Only if the BTK price increases, the different BTK allocations will be released and, in case it does not increase, there will be no new BTK supply release. In other words, an increase in the supply of BTK Tokens will require an increase in demand.
This mechanism ensures three fundamental points for the stabilization and sustainable growth of the price of the BTK token:
- That the distribution is fair and has a cost for new buyers, lowering the propensity to sell below that purchase price.
- That the conditions for buying BTKs are the same for all interested agents.
- That there are no initial items acquired at a low price that can be sold at any price according to classic mechanisms of unblocking over time (shareholders, workers, collaborators, airdrops, etc).
Thus, the internal actors of BitKings Exchange are subject to a major growth of the Exchange and the value of BTK Token.
The initial distribution and allocations are detailed below:
The following illustration presents the distribution in time according to the price of BTK and different allocations:
Progressive Token Sale (50%)
Description: 5,000,000,000 BTK Tokens are put up for sale in the open market of BitKings exchange at a fixed price, following an upward progression. The proceeds from the sale of this item will be entirely allocated to reinvestment and growth of the exchange.
Issuance: 20 allotments of 250,000,000 BTKs for sale, at each +20% price increase, with the first item starting at $0.001 per BTK. The veracity of the issuance can be checked by directly examining the BTK/USDT order books on BitKings Exchange:
Description: 2,500,000,000 BTK granted to the present and future team and shareholders of BitKings Exchange D.O.O. in order to align the interests of both company stakeholders and token holders.
Issuance: 4 allotments of 625,000,000 BTK, unlocked at the prices of $0.006, $0.009, $0.012 and $0.016 per BTK, respectively. Note that unlocking team tokens does not entail that these will be sold. Once prices are reached, BitKings team will allow users to check the unlocked allocations through Ethereum blockchain explorer.
Liquidity Pool (10%)
Description: 1,000,000,000 BTK Tokens reserved in inventory to ensure constant and stable liquidity in the BTK markets on BitKings Exchange, facilitating the trading of BTK Tokens with lower spreads. The proceeds from the sale of this item will be returned in full to the BTK markets in the form of purchase orders, thus maintaining stable liquidity on both sides of the market.
Issuance: Progressive issuance of the liquidity reserve on prices through an advanced market-making algorithm, with the first price being $0.0003 and the last $0.2 per BTK. If that price was ever reached, the liquidity pool would have run out and the BitKings team would have to look for alternatives to increase the pool again. The issuance mechanism can be checked through the BTK order books on BitKings Exchange.
Description: 500,000,000 BTKs sold to 46 participants between August and October 2019, at prices ranging from $0.0003 to $0.0008, raising a total of $194,500 to fund the final development and launch of BitKings Exchange.
Issuance: 100% of the tokens released at the launch of BitKings Exchange, without price conditions (the only allocation without price condition).
Strategic partnerships (5%)
Description: 500,000,000 BTK Tokens reserved for potential future strategic collaborations with other entities that favour the development and growth of BitKings Exchange.
Issuance: 2 allotments of 250,000,000 BTK each that will be unlocked at a price of $0.0035 and $0.006 per BTK, respectively. Once prices are reached, BitKings team will allow users to check the unlocked allocations through Ethereum blockchain explorer.
Description: 500,000,000 BTK Tokens reserved for promotions and marketing campaigns involving user recruitment and engagement processes: referral programs, trading competitions, tips, airdrops, etc.
Issuance: An initial allotment of 50,000,000 BTK Tokens unlocked, then, 30 allotments of 15,000,000 BTKs each, unlocking at +20% price increase, starting at $0.001 per BTK. Once prices are reached, BitKings team will allow users to check the unlocked allocations through Ethereum blockchain explorer.
The BitKings Token (BTK) was born as a utility token with the aim of improving the conditions of the users who hold BTK Token within BitKings Exchange.
This improvement of conditions not only refer to a reduction of applicable fees but also encompasses the overall user experience within the BitKings community. Therefore, users who have BTK Token will also have access to exclusive promotions, BTK Labs projects and will always present an advantage over other users who do not hold BTK Tokens.
As previously stated in this BitKings Token Economic Paper, the BitKings Token BTK is different from other utility tokens because of its way of being distributed in the market. A distribution conditioned only by the price of the BTK Token and not ever by the known conditional of time.
BitKings considers this distribution to be not only innovative but also fair since an increase in the supply of BTKs in the market will require always an increase in organic demand, stabilizing both growth and sustainability of BTK Token.
Overall, in a scenario where utility tokens have historically been mismanaged and even manipulated by the eagerness of some; the BitKings team attributes this unique structure to its BitKings Token BTK and thus makes a statement of intent to its users and the crypto market.
Download BitKings Token Economic Paper HERE
To learn more about BitKings Exchange: Initial Difficulties a Crypto Exchange Faces