Andre retweets, KP3R surges upon news! Keep3r community proposes token economics improvement

The Keep3r community released a new governance proposal yesterday, aiming to enhance the current token economic system of Keep3r. The proposal suggests utilizing KP3R as a bond and introducing a new stablecoin as the protocol's working token.

Token Economy Gets a Major Overhaul

In a proposal by the main contributor Luciano, it was stated that although Keep3r currently allows users (or developers) to use the token KP3R as a payment medium for work fees, KP3R faces issues such as market volatility caused by speculators and lack of liquidity. With an increase in workload, the token could face high inflation, which might restrict the protocol's development and further weaken its adoption in the early stages.

To address this issue, along with the success of Terra in stablecoin UST, Luciano proposed introducing a new mint/burn mechanism linked to a stablecoin (name to be determined) for the Keep3r protocol. In this mechanism, KP3R would serve as collateral for issuing the stablecoin and be used to generate the stablecoin. The generated stablecoin could be used to provide liquidity in the market (e.g., STABLE/ETH, STABLE/3CRV) or as a payment medium within the protocol.

Luciano mentioned that under this mechanism, KP3R would become the "value capture token" in the protocol, while STABLE would be the working token in the ecosystem. As KP3R serves as collateral for generating stablecoins, the mint/burn mechanism of STABLE would have an impact on the supply of KP3R, providing a tightening or loosening effect. The proposal is currently in the discussion stage and seeking community feedback. If approved by the community in the future, this proposal will become part of the Keep3r v2 upgrade.

Since the proposal was released only a day ago, there hasn't been much feedback. However, founder Andre Cronje retweeted the proposal on Twitter yesterday, leading many to naturally assume that Andre Cronje supports the proposal, viewing it as a positive development for KP3R.

https://twitter.com/AndreCronjeTech/status/1402098603426992133