Karma Finance will have its own governance token called KARMA, which will be a reserve currency as well as a multi-utility token. The KARMA token will be the focal point of the Karma Finance ecosystem and will capture the value generated by the ecosystem and redistribute this value to KARMA stakers.
The KARMA token will be the decentralized reserve currency of Karma Finance and backed by the Karma treasury. Every KARMA in existence will be backed by at least 1 USD. This 1:1 ratio may be increased in the future based on the success of Karma Finance and the growth of its treasury. However, KARMA’s price will be determined by the market. The market may value KARMA at more than the backing price due to its utility.
The KARMA token will be designed in such a way that it will gain the utility of each of the protocol tokens in the Karma treasury when staked on the Karma Finance platform. It will be a reserve currency as well as a multi-utility token.
Example: Let’s say Karma Bond partners with Omm and Balanced. Through the bonding fee, Karma’s treasury captures a share of the OMM and BALN tokens. KARMA token holders can stake KARMA on the Karma Finance platform and receive passive income from BALN and OMM staking rewards. This is just an example for 2 protocol partnerships.
The utility of KARMA will grow with every new protocol that is on-boarded through Karma Bond.
KARMA token stakers will be able to vote on all the Karma Finance proposals through an on-chain governance process.
More details will be released around Karma Finance ecosystem and the KARMA token in due course. The plan is for the Karma Bond service and Karma Finance to become a multi-chain protocol with the help of ICON’s BTP technology. The focus is to successfully launch the Karma Bond service first and then launch Karma Finance.