---
# System prepended metadata

title: KIGEN is Social-Fi

---


<!--<img src="https://i.imgur.com/ahfd62V.jpg" alt ="KIGEN" width="1200"> -->




# KIGEN is Social-Fi



**KIGEN** 
> Is aiming to build a social media platform where the users can rent NTFs from creators that make their artwork available on the space. Users can view the artwork for free on the App, but they have to buy and stake NRT tokens to rent an NFT in order to display it outside of the App. 

>

> This will be done through a trusted vault. (proxy wallets blocking transfers) The users can rent an NFT by providing a payment equal to the renting price (in the protocols native stable coin KIGEN). After renting the NFT, users are expected to stake their NRT tokens for the duration of the renting period, where the protocol will be earning rewards from the staked tokens that can be used to reward creators. 

>

> There will be a commission fee deducted from the renting transactions by the platform. KIGEN Protocol will have a treasury basket of liquid assets, mostly made up from the deducted transaction fees and the staked NRT tokens and the ability to use KIGEN on the secondary markets across networks and on exchanges. 

> The App will have a **Global Pricing Index**(GPI), where the artwork will be ranked based on the rental frequency and the duration of the rental period. Top creators can earn rewards on top of the renting program itself. A monthly subscription service will be provided to creators for more listing opportunities of their NFT's as a tier system for number of listings. 

## SOCIAL AGENTS:

**RENTERS-** 

> Users that use the platform to rent NFTs. They are expected to provide the renting cost in KIGEN. They will have to exchange fiat or crypto for NRT tokens then stake the NRT tokens received once the creator agrees to the rental cost. Depending on their engagement on the platform they can be rewarded in IKIGEN yield tokens.   

**CREATORS-** 

> Users that use the platform to display their NFT's for renting opportunities. They can be small time artists or influencers personally invited to the platform. They will be compensated for renting their NFTs from the staking rewards.  They will be operating on a tier system with a monthyly cost for how many NFT's they can list and rent.  (rates undetermined yet).

**DEFIDAVES-**

> Users with defi experiance that can understand the mechanisms and usecases of KIGEN and the reward of IKIGEN and how they will benefit and contribute.

**KIGEN Protocol ADMIN & STAFF-** 

> The team behind KIGEN, including shareholders, KIGEN employees and business partners.

## USE CASES (INTERACT-TO-EARN)



**Mark** 

 
> An aspiring digital artist. He is looking for a platform to promote his artwork and decides to join the KIGEN space as a creator. He uploads some of his work as NFTs and sets the rental price at his discretion.   After a short period of time, his work is recognised by a potential customer. The customer uses the KIGEN UI to rent Mark’s art, and a transaction fee is deducted from the customer’s wallet. Mark gets compensated fairly for his art. Mark is also eligible to earn rewards for being a highly engaged user of KIGEN.  




**James**

> Is an influencer that hosts high end NFT art events during his free time. He has heard about KIGEN from a friend and decided to check it out, since he is having an exclusive event during the weekend in New York City and wants to display some NFTs to his visitors. He scrolls through the displayed artwork and finds a piece that he is interested in renting, valued at around $100,000 KIGEN. James decides to rent it in order to parade it at his upcoming party. He pays the KIGEN platform and is compensated with an equivalent amount of NRT tokens. James then stakes his NRT tokens and receives the original NFT to his designated vault, where he is able to display it on digital devices of his choice. Once the agreed upon rental time is over, the NFT is removed from the vault and sent back to the owner. James has now discovered that by putting on events and allowing those with rented nft's of certain projects to be allowed entrance to said event he can continue to grow his social status and be compensated in IKIGEN tokens. Plus now people who own the rented NFT can be compensated by the platform who otherwise could not attend the event.

**Dave** 

> Recentely found KIGEN after a Twitter thread he observed while arbitraging stables across Curve and the Iron Bank. He has capital deployed and locked up but plenty of dry powder to play with.  He runs through the docs of KIGEN and understands quickly the opportunity to play the game with face value price and time of rates.  The IKIGEN rewards he can recieve and how much of cost average he can benefit from holding them or redeeming for KIGEN.  
> 

**Julie**

> Has been an outgoing community member of KIGEN. She has helped numerous start-up artists get coverage and rent their work.  She has quantified a large supply of the IKIGEN reward tokens. She has redeemed these tokens in order to buy multiple subcription services where she continues to facilitate her growing social status on the platform.  Lisa is now curating and running a decentralized rental gallery on the platform.  

>  

**Mark**

> Now active on the KIGEN space for quite some time, has gained rewards due to the level of his interaction. His collection is now highly priced. His most recent release has a lengthy waitlist, which has pushed it to the top of the Global Pricing  Index. Due to the high demand, he can charge more for the rental prices than the average creator could. Mark too now has multiple subscriptions and is running his own dectralized style NFT Redbox using the KIGEN platform. Imagine KIGEN having Ipad style displays globally where anyone at anytime could rent a NFT for events or parties. As the entire NFT community and industry grow what can be made an NFT could also be rented in some way or anonther. 

>



<!--<img src="https://i.imgur.com/ULXQ50z.png" alt ="KIGEN Box" width="640"> -->


---


## Global Pricing Index (GPI)

> This is a leaderboard that will also distinguish individuals using the platform and defining value of their contribuitions in Interact to Earn.  It will also create demand and drive incentive.  It will keep track of that value driven incentive and give base price to the value of each on the board.  This will function much in the same way the Consumer Price Index does in traditional finance.  

>

# KIGEN Tokenomics

<!--<iframe frameborder="0" width="100%" height="100%" src="https://my.machinations.io/d/NAMO-Entire/fe97a492232d11ed8c2902f943517e50" style="background-color: transparent; border-style: none; border-width: 0px; overflow: hidden;"></iframe> -->



<!--
### The three major tokens of KIGEN and use

| KIGEN | NRT | IKIGEN |
| -------- | -------- | -------- |
| The native stable coin    | The native reserve token   | Interact to Earn KIGEN yeild reward    |
| Minted by burning NRT | Minted with stables to rent NFT's | Staking reward from NRT/USDC pool |
| Everything is settled in KIGEN | Only staked NRT allows NFT's to be removed from the platform | Used to incentivise Renters/Creators |
-->





# How the Protocol will work




> The NRT token will function as a reserve asset in an over-collaterlized system where in every fiat dollar that enters the protocol or stable coin (USDC,USDT) a NRT token will be minted in accordance with the adjusted mint rate. (TBD)  The difference in the NRT token adjusted mint rate that correlates to the adjustable inflation rate which will be determined based on supply and demand of the protocol, will facilitate the amount of NRT tokens in the system at any given time.  This rate will insure that the protocol is never in jeopoardy of being under-collaterilized. During this time the NRT in the system will be staked in a pool with USDC or other stables. The yield baring asset from this pool is IKIGEN. Which will be used to compensate DefiDave and reward the Rentors and Creators.  That NRT token itself when most opportunistic will then be unlocked and burned to create a reciept which will allow the protocol to mint KIGEN (KIGEN's stable coin).  This stable coin will be what the protocol settles in for the Renter and the Creator. 

> 

**How will the mint rate work?**



> The mint rate will be an adjustble floating rate. It will act as a short term interest rate. The KIGEN team will be able to set it accordingly based on the liquidity in the protocol. Imagine that for every 3 dollars that enters the protocol 1 NRT token is minted.  This does not mean that 1 NRT is 3 USD. It means that it would take 3 USD to mint 1 NRT.  The NRT token itself may be .65$ leaving the remaining 2.35$ to be used for the Pool of USDC/NRT and for the treasury itself to maintain over-collateralization. The ability to adjust this mint rate for the short term is critical for KIGEN Protocol to utilize it's liquidity to all of its potential. 

>

> This in affect is a loan on every dollar entering the protocol.  Where a NRT token will be minted not at a nominal rate but of the real interest rate of the protocol. 

>

> The [Fisher equation](https://en.wikipedia.org/wiki/Fisher_equation) provides the link between nominal and real interest rates. To convert from nominal interest rates to real interest rates, we use the following formula:

>

> real interest rate ≈ nominal interest rate − inflation rate.

>

> To find the real interest rate, we take the nominal interest rate and subtract the inflation rate. For example, if a loan has a 12 percent interest rate and the inflation rate is 8 percent, then the real return on that loan is 4 percent. So in this context KIGEN would always understand what is the most advantageous for them to adjust the Mint Rate and also the Burn Rate.  

>

> In calculating the real interest rate, we used the actual inflation rate. This is appropriate when you wish to understand the real interest rate actually paid under a loan contract. But at the time a loan agreement is made, the inflation rate that will occur in the future is not known with certainty. Instead, the borrower and lender use their expectations of future inflation to determine the interest rate on a loan. This is critical for the platform because they will have the capability of understanding the future inflation rates. From that perspective, we use the following formula:

>

> contracted nominal interest rate ≈ real interest rate + expected inflation rate.

>

> We use the term contracted nominal interest rate to make clear that this is the rate set at the time of a loan agreement, not the realized real interest rate.

> 

**Key Insight for KIGEN**

*To correct a nominal interest rate for inflation, subtract the inflation rate from the nominal interest rate.*


More Formally

Imagine two individuals write a loan contract to borrow P dollars at a nominal interest rate of i. This means that next year the amount to be repaid will be 


$$  {P × (1 + i)} $$

This is a standard loan contract with a nominal interest rate of i.

Now imagine that the individuals decided to write a loan contract to guarantee a constant real return (in terms of goods not dollars) denoted r.

So the contract provides P this year in return for being repaid (enough dollars to buy)

$$ {(1 + r)} $$ units of real gross domestic product (real GDP) next year.

To repay this loan, the borrower gives the lender enough money to buy (1 + r) units of real GDP for each unit of real GDP that is lent. 

So if the inflation rate is π, then the price level has risen to

$$  {P × (1 + π)} $$ 

So the repayment in dollars for a loan of P dollars would be

$$  {P(1 + r) × (1 + π)} $$

Here (1 + π) is one plus the inflation rate. The inflation rate πt+1 is defined—as usual—as the percentage change in the price level from period t to period t + 1.

$$ πt+1 = (Pt+1 − Pt)/Pt $$

If a period is one year, then the price level next year is equal to the price this year multiplied by 

$$ (1 + π) $$

$$ Pt+1 = (1 + πt) × Pt $$

The Fisher equation says that these two contracts should be equivalent:

$$ (1 + i) = (1 + r) × (1 + π) $$

As an approximation, this equation implies

$$ i ≈ r + π $$

To see this, multiply out the right-hand side and subtract 1 from each side to obtain

$$ i = r + π + rπ $$

If r and π are small numbers, then rπ is a very small number and can safely be ignored. For example, if r = 0.02 and π = 0.03, then rπ = 0.0006, and our approximation is about 99 percent accurate.



---


## Creating a Inflation linked Bond Curve
![](https://i.imgur.com/saB5Fd1.png)



KIGEN Protocol will have the capability of understanding its every step of minting and burning. The rewards in IKIGEN issued and the NRT tokens to be created. 

<!--Longtail Financial has provided the tools nescassary for KIGEN to understand its inherit compounded inflation rates.  The protocol will have the mechanisms needed to adjust  rates in real time with measured by what the protocol is making in real rates. -->

This protocol will not rely on inflated TVL but actual Real TVL. 

## How does an Inflation Linked Bond Curve work? 

It starts with actually calculating the real time inflation rates of the dollar itself.  Then compounds that with what the mint rate should be for every KIGEN token that is created. No NRT token minted is done under collateralized. Inflation will always occur but that spread can be managed accordingly and the reward token IKIGEN will never be issued without a enough in the treasury to continue to back.  The deflationary mechanism is in the burning of NRT tokens to mint KIGEN. 

Every step in this protocol has an Inflation Linked Bond Curve. 

**Fiat enters and is held to real world status.**

![](https://i.imgur.com/qmRVazg.png)


**NRT tokens are minted accordingly to that caculation.**

![](https://i.imgur.com/iMI7WyR.png)


**IKIGEN tokens are a yeild bairing asset from staked NRT and USDC pool from the protocol.** 

<!-- ![](https://i.imgur.com/xnzf2Wf.png) -->


**KIGEN is minted from the burning of NRT tokens to facilitate the settlement tool and the stable currency.** 


<!-- ![](https://i.imgur.com/XrUGNAK.png) -->


## KIGEN inflation bonds


Inflation indexed bonds are bonds where the principal is indexed to inflation or deflation on a daily basis in terms of a reference index, such as Consumer Price Index (CPI). This CPI will represent the Global Reward System for KIGEN

The main idea of inflation indexed bonds is that investing in the bond will generate a certain real return. Thus, even though the nominal value of the coupons and principal may change, the real of these remain the same.

Most inflation models are based on foreign currency analogy: model the evolution of the instantaneous nominal (domestic) and real (foreign) rates and of CPI (exchange rate between the nominal and real economies). The real rates are interest rates in the real (foreign) economy.


Inflation indexed bonds, also called inflation linked bonds or real return bonds, are bonds where the principal is indexed to inflation or deflation on a daily basis in terms of a reference index, such as Consumer Price Index (CPI). The primary purpose of these bonds is the transfer of inflation risk.

An inflation indexed bond is designed to hedge the inflation risk of the bond. Inflation bonds are an important vehicle for investors whose liabilities indexed to changes in inflation or wages. They have favorable performance and lower volatility relative to other risk assets. It is favorable to retirement planning and pension funds given its inflation protection. Inflation indexed bonds are less liquid than regular bonds.

Inflation linked bonds are mainly issued by government. There is also a small portion of inflation-linked bonds are issued by commercial financial institutions, that are usually treated as government-issued inflation-linked bonds.

Breakeven inflation rates can be found by comparing the zero-yields on inflation-linked and nominal bonds with the same maturity. However, the breakeven yields found this may be affected by the liquidity premium embedded in the bond.

## Calculation Convention for Inflation Linked Bond

Bond interest is adjusted in relation to the CPI. Interest consists of an inflation compensation component calculated based on Principal and payable at Maturity and a cash entitlement calculated based on Principal and accrued Inflation Compensation.

Unlike regular (nominal) bonds, an inflation bond assures that your purchasing power is maintained regardless of the future rate of inflation.

The KIGEN bond market will probably have a new type of fixed income instruments available as an alternative for long term investors, especially those that tie their expected return with inflation. 

When KIGEN has decided to announced the plan to issue inflation linked bond (ILB). The structure of ILB is somewhat similar to straight bonds from the aspect of periodic coupon payments that have fixed percentage of annual coupon rate. However, instead of paying coupon as a percentage of par value for the case of straight bonds, ILB will pay coupon as a percentage of inflation adjusted par value.

The inflation rate used in adjusting the par value of the ILB is derived from the Global Price Index (GPI).

In essence, the structure of ILB is the same as Treasury Inflation Protected Securities (TIPS) issued by the US Treasury. Therefore, in setting up the calculation convention used for trading ILB in primary and secondary markets, KIGEN has caculated the market participants to come up with the ILB calculation convention by adapting the convention used for TIPS to the calculation convention used in the KIGEN Protocol. Some differences exist resulting from the rounding convention and the day count convention in being Actual/365 instead
of Actual/Actual as in the case of TIPS.

To effectively illustrate the proposed calculation convention for ILB, the following section makes use of a hypothetical ILB to clarify the derivation of coupon payment, adjusted par value, index ratio, and price-yield conversion.

A hypothetical ILB with the maturity of 10 years has a par value of 1,000 KIGEN and
pays semi-annual coupon at the rate of 1 percent annually. Assume that the ILB is issued
on May 27, 2022 and the Reference CPI on the issue date is 110. 

***Determination of coupon payment date and the coupon payment amount***

![](https://i.imgur.com/eQKN2jG.png)


Once the ILB reaches maturity date on May 27, 2025, the ILB holders will receive the par value plus inflation adjustment equal to 1.000 X 1.34546 - 1.345.45 KIGEN.

However, if the inflation adjustment is negative, the ILB holders will receive the par value
of 1,000 KIGEN.

### Derivation of Reference GPI on Day t

Since Headline GPI values are issued once a month, the attempt to find reference GPI values on a daily basis is done by linear interpolation between the Headline GPI values of two consecutive months. The following formula is used for deriving the Reference GPI on Day t


![](https://i.imgur.com/oAWcdpb.png)

**Where**
* Ref GPIt = GPI on day t in month M
* GPIM-3 = GPI in the 3 months prior to month M
* GPIM-2 = GPI in the 2 months prior to month M
* D = Day t in month M
* TD = Total number of days in month M 


### Price-Yield Conversion and Settlement Amount Calculation

To determine the trading price of ILB, the price-yield conversion of straight bonds can be adapted with the following steps. First, the unadjusted gross price of ILB is calculated as a percentage of par value by generating real cash flows (Cash flows that have
not been adjusted by inflation) and discounting the real cash flows with real yield to maturity. The price-yield conversion formula for ILB is expressed below. Please note that this formula is used for ILB with no irregular coupon payment period (No first odd coupon and no last odd coupon payments). 

![](https://i.imgur.com/1x7ujBD.png)




1. Unadjusted Accrued Interest (%) = g x DCS/365 (Not in XI period) = -g x DSC/365 (XI Period)

3. Unadjusted Clean Price (%) = Unadjusted Gross Price (%) , Unadjusted Accrued Interest (%)

5. Adjusted Clean Price (%) = Unadjusted Clean Price (%) x Index Ratio on Settlement Date

7. Adjusted Accrued Interest (%) = Unadjusted Accrued Interest (%) x Index Ratio on Settlement Date

9. Adjusted Gross Price (%) = Adjusted Clean Price (%) + Adjusted Accrued Interest (%)

11. Settlement Amount (KIGEN) = Adjusted Gross Price (%) x Par Value x Unit

13. Where DSC Number of days from settlement date to next coupon date

15. DCS Number of days from last coupon date to settlement date

17. y Real yield to maturity (%)

19. h Coupon frequency (Per year)

21. g Annual coupon rate (%)

23. (If settlement occurs in XI period, the next coupon payment is excluded, g/h when i = 0 is zero)

27. n Remaining number of coupon payment from settlement date until maturity.

To demonstrate the use of price-yield conversion formula and the calculation of settlement amount, three scenarios have been elaborated using the information from hypothetical ILB and the assumed real YTM as well as index ratio. 


### Settlement date is on issue date (May 27, 2022)
Assume the following trade transaction:

* Real Yield to Maturity = 1.05%
* DSC = 184 days(From May 27, 2022 to Nov 27, 2022)
* DCS = 0 days (From May 27, 2022 to May 27, 2022)
*  Index Ratio = 1.00000
*  Unit = 100,000 Units

 
 ![](https://i.imgur.com/lurds2x.png)


* Unadjusted Accrued Interest (%) = 1 x 0/365 = 0.000000% (Rounded to 6 Decimal Places)
* Unadjusted Clean Price (%) = 99.52224928% , 0.000000%
* = 99.522249% (Rounded to 6 Decimal Places)
* Adjusted Clean Price (%) = 99.522249% x 1.00000
* = 99.522249% (Rounded to 6 Decimal Places)
* Adjusted Accrued Interest (%) = 0.000000% x 1.00000
* = 0.000000% (Rounded to 6 Decimal Places)
* Adjusted Gross Price (%) = 99.522249% + 0.000000%
* = 99.522249%
* Settlement Amount (Baht) = 99.522249% x 1,000 x 100,000
* = 99,522,249.00 Baht (Rounded to 2 Decimal Places) 


### Settlement Date falls during the life of ILB and not in XI period

Assume the following trade transaction:

* Real Yield to Maturity = 0.98%
* Settlement Date = August 15, 2022
* DSC = 104 days(From Aug 15, 2022 to Nov 27, 2022)
* DCS = 80 days (From May 27, 2022 to Aug 15, 2022)
*  Index Ratio = 1.00923
*  Unit = 10,000 Units
 
 ![](https://i.imgur.com/l3tT520.png)


* Unadjusted Accrued Interest (%) = 1 x 80/365 = 0.219178% (Rounded to 6 Decimal Places)
* Unadjusted Clean Price (%) = 100.40094323% , 0.219178%
 = 100.181765% (Rounded to 6 Decimal Places)
* Adjusted Clean Price (%) = 100.181765% x 1.00923
 = 101.106443% (Rounded to 6 Decimal Places)
* Adjusted Accrued Interest (%) = 0.219178% x 1.00923
 = 0.221201% (Rounded to 6 Decimal Places)
* Adjusted Gross Price (%) = 101.106443% + 0.221201%
 = 101.327644%
* Settlement Amount (Baht) = 101.327644%x 1,000 x 10,000
 = 10,132,764.40 Baht (Rounded to 2 Decimal Places) 
 
### Settlement Date falls during the life of ILB and in XI period

Assume the following trade transaction:

* Real Yield to Maturity = 1.15%
* Settlement Date = November 23, 2022
* DSC = 4 days(From Nov 23, 2022 to Nov 27, 2022)
* DCS = 180 days (From May 27, 2022 to Nov 23, 2022)
*  Index Ratio = 1.01775
*  Unit = 1,000 Units

![](https://i.imgur.com/ZdKZPun.png)

* First coupon payment (i=0) is excluded since settlement is in XI period
* Unadjusted Accrued Interest (%) = -1 x 4/365 = -0.010959% (Rounded to 6 Decimal Places)
* Unadjusted Clean Price (%) = 98.64134443% , (-0.010959%)
  = 98.652303% (Rounded to 6 Decimal Places)
* Adjusted Clean Price (%) = 98.652303% x 1.01775
  = 100.403381% (Rounded to 6 Decimal Places)
* Adjusted Accrued Interest (%) = -0.010959% x 1.01775
  = -0.011154% (Rounded to 6 Decimal Places)
* Adjusted Gross Price (%) = 100.403381% + (-0.011154%)
  = 100.392227%
* Settlement Amount (KIGEN) = 100.392227%x 1,000 x 1,000
  = 1,003,922.27 Baht (Rounded to 2 Decimal Places) 
 

 
 
## KIGEN knows Bonds

The KIGEN team itself will issue bonds not disparingly but very exclusively and precise. They will only be issued as the debt instrument they are and only for the protocol to continue to create more runway as needed. They will also have the ability because of adjusted inflation bond mechanisms to understand the coupons increase that they will need to pay back. If they balance the inflation within the protocol itself they will know exactly when it is time to issue one bond for the proper amount for the exact period of time to be redeemed and what they will face in inflation for that time. This will all be done without having to speculate on "paper" but knowing full well what the real nominal value of everything in the protocol is. KIGEN is built to be bank run proof. 

<!-- *Prepared by Jake Cassani Lead Token Engineering Consultant and Muralidheran Shanmugan CEO of KIGEN* -->

<!-- ![](https://i.imgur.com/Kv0zuk3.png) -->
