KGH Utilities

The utility features of KGH NFT are designed to offer a rewarding experience to its holders, both in terms of consistent token rewards and participation in the network's governance through validator reward sharing. Below is the detailed explanation about each utility:

1. KRO token Rewards for KGH NFT Holders

Consistent Monthly Rewards(10 Months)

KGH NFT holders are eligible for a distribution of KRO tokens. Beginning from the Token Generation Event (TGE) in mid Q3, 2024, holders can claim 10% KRO tokens monthly. This reward distribution extends over a period of 10 months, providing a steady stream of benefits to the NFT holders.

Additional KRO by Referral Program Bonus

In addition to the monthly KRO tokens, KGH NFT holders can further augment their rewards through a referral program. This initiative encourages and rewards the expansion of the KGH community by incentivizing existing members to bring new participants into the fold. You can find more details about the referral program here.

2. Boosting Priority Validator Selection, Validator Reward & Reward Share

Currently, the validators of Kroma bond ETH to an output and receive validator rewards in ETH when the submitted output is finalized. After the TGE, however, the validators will be required to stake KROs to participate in the Kroma validator system and will receive the validator rewards in KRO tokens. By staking their NFTs to the validator nodes, holders can not only contribute to the network's security and efficiency, but also accrue KRO tokens in the form of shared validator rewards. The staking utility will be available once the validator system is upgraded.

Increasing Priority Validator Selection Probability

When KGH NFTs are staked to a validator node, it automatically delegates the locked or unclaimed KRO tokens of the KGH NFT to the validator. This leads to an increase of the priority validator selection probability for the validator node.

The probability of a validator node can be calculated as the following:

$$Pr(V_i) = {{S_i + D_i}\over \sum_{k=1}^n(S_k + D_k)}$$

where

• $V_i$: i-th validator

• $S_i$: the amount of the staked KRO tokens by the validator $V_i$

• $D_i$: the amount of the delegated KRO tokens to the validator $V_i$

Boosting Validator Reward

When KGH NFTs are staked to a validator node, the validator node itself also gets the reward boost.

The percentage increase in validator rewards per staked KGH NFT can be calculated as the following:

$$R_i=0.4⋅arctan(0.01⋅G_i)$$

where

• $R_i$: the boosting percentage of a validator $V_i$

• $G_i$: the total number of staked KGH NFT on a validator $V_i$

Please note that depending on the performance of the chosen validator and the reward share ratio set by the chosen validator, the reward share can vary. This mechanic encourages NFT holders to engage actively with the network by assessing and selecting validators judiciously. It aligns the interests of the NFT holders with the overall health and security of the Kroma network, ensuring that only the most competent and honest validators are incentivized.