Category: Constitutional KIP - Process
Title: Split-Save Mechanism
Author: Karrat Foundation
Abstract:
This document outlines the proposed implementation of the Split-Save mechanism within the constitutional framework of KARRATco, governing the use of the $KARRAT Token as defined in this Karrat Improvement Proposal (KIP). The Split-Save mechanism is designed to facilitate the division of $KARRAT Token proceeds from the initial sale or minting of any on-chain asset between two primary destinations: the wallet address launching the collection, asset, or product, and the KARRATco Vault.
The Split-Save mechanism operates through a set of factory contracts, offering flexibility to users by allowing them to choose how the proceeds are split between their wallet and the Vault. This system ensures that a portion of the $KARRAT Tokens earned is stored in the Vault, which remains under the governance of KARRATco. Future decisions regarding the transfer of tokens from the Vault will require a vote through a Non-Constitutional KIP, with a quorum percentage of 98% needed for approval.
The integration of this mechanism aims to promote a sustainable community within the KARRATco ecosystem, ensuring both immediate liquidity for asset creators and long-term value retention within the Split-Save Vault.
Key Terms:
Spit-Save: The mechanic by which minting cost or purchase is split between two wallets, the wallet address that launches the contract of the purchasable asset or product and the KARRATco governed Vault
Vault: A KARRATco governed wallet set up in a similar fashion to the Foundations Treasury but with a 98% quorum required to access the tokens vaulted
Factory Contracts: Blockchain contracts that act as “factories”, automating the process of deploying new smart contracts with predefined templates or structures. This allows developers to efficiently create standardized contracts with consistent functionality. Factory contracts streamline the deployment process, ensuring uniformity while enabling customization options, making them ideal for scalable applications that require numerous contract deployments.
Motivation:
The motivation behind the split-save is to create a mechanism for long term sustainability of the community by moving a portion of each transaction of minted assets into a vault. By committing these funds to a secure vault which would require a 98% quorum to unlock, we are committing a threshold that would require almost full collective decision making to unlock. This creates a unique opportunity to build community confidence and commitment, as every transaction supports the collective vision of a more sustainable future for $KARRAT. Members can feel empowered knowing that their active participation in the network contributes to the overall strength and longevity of the community, fostering a sense of unity and purpose within the KARRATco. Additionally, creators will have access to a built in and active community with KARRAT, helping bootstrap a new project or community. The potential network effect of contributing to and growing an existing ecosystem increases a creator’s opportunity for adoption and success of a project or product.
Rationale:
The primary rationale for the Split-Save Mechanism is to build a robust and sustainable economy for $KARRAT. This approach not only secures part of each transaction into the Vault but also fosters community trust by involving members in the network’s financial security. By tying proceeds to a collective vision and requiring near-unanimous consent for Vault transfers, the mechanism strengthens the stability of $KARRAT, encouraging active participation and commitment from community members and builders.
This mechanism allows for any creator using $KARRAT for minting their collections to set the threshold for splitting at whatever they percentage would like. This ensures that the creator can earn the desired amount per transaction but requires a portion to be “saved” therefore limiting the total amount of tokens that are being traded due to the near-unanimous quorum needed to access the locked tokens. The Split-Save mechanism has a mandatory 1% that must be split to the Vault, however a creator is incentivized to set the threshold higher for more KARRATco engagement.
Specifications:
The specific mechanisms of the Split-Save process are suggested to work as follows:
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The initial sale or minting of any asset that is on chain and purchased in $KARRAT will be split between two locations. One location being the wallet address launching a collection, asset, or product and the other being the Vault.
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The Split-Save mechanism would be a set of factory contracts that allows for the user launching a collection, asset or product to make a choice of which factory Spit-Save contract to use. This choice would indicate how much of the $KARRAT received upon mint/purchase is sent to the launching wallet address and to the KARRATco Vault, or in other words, how much is “split”.
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The Vault would be under the governance of the KARRATco, meaning that $KARRAT tokens in the Vault could at some point be voted on through a Non-Constitutional KIP to be moved from the Vault.
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It is proposed that the quorum percentage needed for approval to move $KARRAT tokens out of the Vault be set at 98%.
Steps to implement:
Below are the steps of the entire process for implementation:
- Split-Save Contracts are written and audited by a respected audit house.
- Upon the passing of this KIP, the Split-Save contracts will be launched
Overall cost:
It is recommended that the Karrat Foundation incur the cost of this project via the Foundations operational budget:
Smart contract development of split-save mechanism and factory contracts
Auditing of all contracts
This KIP is a constitutional proposal and in no way touches the KARRATco Treasury.