# King Protocol Factsheet Last Updated: January 23, 2025 ### Overview * King Protocol simplifies the process of receiving LRTs for users. * There are two relevant tokens: **KING** and **QUEEN**. * King Protocol has partner protocols: LRT providers who are approved through governance * There is an entity called QueenDAO that makes governance decisions surrounding **KING** ### King Token * **KING** Tokens are created by a *pro rata* minting process where allowed tokens are exchanged for **KING**. * Minting **KING** produces *seignorage* revenue for QueenDAO. For every 1.0 **KING** token that is minted, there is $p = 0.05$ KING tokens sent to QueenDAO. * Only approved entities (e.g. partner protocols) can mint **KING**. * Initially, the partner protocols are determined via offchain agreements. Later, they will be approved by QueenDAO governance proposals. * Minting of **KING** is limited. For a given epoch, the minting rates for **KING** are determined by QueenDAO governance. * As part of this process, **KING** uses price oracles to determine the value of the collateral provided. * **KING** tokens can be redeemed by burning the **KING** token, which enable the user to claim the percentage of the token's underlying collateral. * There will be portfolio management decisions, determined by QueenDAO. * To adjust the portfolio holdings, partners will be incentivized to provide tokens where the allocation should be increased. ### Queen Token * **QUEEN** Token has a finite supply, created through a one-time Token Generation Event (TGE) * A portion of this allocation will be reserved for partner protocols * The portion reserved for partner protocols will be streamed each epoch, using an allocation mechanism. * The allocation mechanism is an objective function using onchain data as input. * Desired property of the allocation mechanism: reward protocol performance during the epoch, i.e. doing things that help King Protocol should result in greater proportion of allocation * Desired property of the allocation mechanism: there should be something of a normalizing "whale resistance" effect * The allocation mechanism consists of 1.) assigning a *partner grade* using an objective formula, 2.) calculating *expected value* using another formula, 3.) combining these numbers in another formula to produce the final results * Partner grades depend on the following factors: Liquidity, Velocity, Integration, Lindy * Expected Value depends on the following factors: (currently none known) * The parameters of the allocation mechanism can be changed through governance in QueenDAO.