Token Use Case
Last updated
Last updated
1. Principal Cover
KNJ is the native token of the protocol and has been utilized for the Principal Cover. Principal Cover has been established to compensate investors based on the amount of KNJ staked and the maximum Cover allowed for the vault. Negative returns after 1 year trigger the activation of the compensation clause.
At Kunji, the security of our investors' assets is our utmost priority. That's why we employ multiple measures to protect our investors’ capital. The proprietary Principal Cover framework system guards against managers dealing irresponsibly with your capital.
Asset managers must stake a minimum of 5 KNJ for every 100 USD of AUM in the vault to protect investors' principal investments.
Benefits of Principal Cover
Protects depositor's funds.
Protects your capital against irresponsible managers and behaviors.
Minimizing the volatility risks.
Eligibility criteria for Principal Cover:
Users should remain invested for more than six(6) months in a row until the settlement date.
If the user withdraws funds, he/she will not be eligible for principal Cover.
KNJ locked represents the number of KNJ tokens that have been locked.
Max protection represents the percentage (%) of staked KNJ tokens that will be used to compensate the depositors in case of loss incurred by then after a year’s investment.
Time Lock represents the duration for which the KNJ tokens are locked.
Reserved Tokens represent the percentage(%) of KNJ tokens reserved to cover the loss.
Estimating Principal Cover:
Out of all staked KNJ tokens, 30% of KNJ tokens will be reserved to cover the loss (Let’s call this reservedTokens). That is, the maximum Cover provided in case of loss will be 30% of the staked KNJ token.
If Total Loss Amount ($)* < Reserved tokens ($), then the individual user’s loss will be compensated in Reserved Tokens (KNJ).
Let’s assume, Staked KNJ Token = 1,00,000 [The numbers used are not actual; they are solely for explanatory purposes]
*Total Loss Amount($) = Sum of all eligible users’ loss.
If Total Loss Amount ($) < Reserved tokens ($), then the individual user’s loss will be compensated in Reserved Tokens (KNJ). Example: If total loss amount = $10,000 & Reserved Tokens = 30,000 KNJ (worth $30,000), then 10,000 KNJ will be compensated for the loss of $10,000. Coverage Provided = 10,000/1,00,000 KNJ = 10% of the Staked Tokens
Staked Tokens
1,00,000 KNJ ($1=1KNJ)
Reserved Tokens
30,000 KNJ
Total Loss
$10,000
Coverage Provided (KNJ)
10,000 KNJ
Cover Provided (%)
10% of Staked Tokens
User 1 Loss
$4,000
User 2 Loss
$6,000
User 1 Compensation
4,000 KNJ = 100% of User 1 Loss
User 2 Compensation
6,000 KNJ = 100% of User 2 Loss10,000 KNJ
If Total Loss Amount ($)* > Reserved tokens ($), then all reserved tokens will be distributed to users based on the share of their individual loss out of the total loss amount.
Staked Tokens
1,00,000 KNJ ($1=1KNJ)
Reserved Tokens
30,000 KNJ
Total Loss
$50,000
Cover Provided
30% of Staked Tokens
User 1 Loss
$40,000
User 2 Loss
$10,000
User 1 Compensation
24,000 KNJ = 60% of User 1 Loss
User 2 Compensation
6,000 KNJ = 60% of User 2 Loss
Coverage Provided = 30,000/1,00,000 KNJ = 30% of Staked Tokens (Max)
Example: If total loss amount = $50,000 & Reserved Tokens = 30,000 KNJ (worth $30,000). Total users = 2, who incurred a loss of $40,000 & $10,000 respectively. Coverage for user 1 = (40,000/50,000) x 30,000 KNJ = 24,000 KNJ Coverage for user 2 = (10,000/50,000) x 30,000 KNJ = 6,000 KNJ
*Settlement date: 1 year from the date of inception.
2. Governance Functions
KNJ holders have the power to control various governance functions within the Kunji Finance platform. These functions include:
3. Staking
KNJ token holders can stake their tokens on the Kunji Finance platform and receive rewards by participating in staking pools. On the platform, there are three staking pools-GOLD, SILVER, and BRONZE-based on rewards and the minimum amount of KNJ staking. APR is based on the total number of KNJ tokens staked and the total rewards for each pool.
