Improving the Token Landscape in KONG Land

General
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This post aims to provide a comprehensive assessment of the current KONG Land token landscape and start a discussion. The objective is to create a more streamlined, valuable, and user-friendly ecosystem through token consolidation and utility enhancement. Additionally, there is potential to explore migrating to an L2, like Base, and consider other creative ideas to add value to KONG Land, such as creating an L3.

Current Challenges

  • Too Few Citizens: With only 500 Alpha tokens and less than half burned, the number of active citizens is insufficient for robust community engagement. There is no clear path to citizenship today.
  • Broken Liquidity: The Alpha $CITIZEN (ERC20) suffers from lopsided liquidity pools, making it difficult to acquire affordable citizenship.
  • Complexity: The process to burn $CITIZEN (ERC20) into $CITIZEN (ERC721) is complicated. It involves scanning a physical KONG Land passport with the KONG app. This process is no longer possible due to the passport distribution being on hold and the KONG app being removed from the iOS app store.
  • Fragmentation: Multiple tokens, including $CITIZEN ERC721, $CTZN, and Green Card tokens, create significant complexity and confusion, adding overhead to management and deterring potential new citizens from engaging effectively with KONG Land.

The goal is to reduce the number of tokens, focus on key tokens, and create a cohesive experience.

KONG Land Tokens

Hereā€™s the current list of tokens in our ecosystem:

1. $CITIZEN
Alpha Citizen and governance token representing early citizenship in KONG Land. Previously qualified for the initial $LAND airdrop, with future distributions likely shifting to a UBI model. Can be burned for $CITIZEN (ERC721).

2. $CITIZEN
Created by burning the $CITIZEN (ERC20) token to reveal Alpha PFPs. Used for governance.

3. $CTZN
Created to recruit additional citizens. Previously qualified for the initial $LAND airdrop. Does not have an associated PFP.

4. $METIC (KONG Land Green Card - Season 2024)
Provides temporary, two-year access to citizen-only channels on KONG Landā€™s Discord and access to embassies during IRL events.

5. $LAND
Economic token representing contributions made to KONG Land. Distributed through an initial airdrop to $CITIZEN and $CTZN holders, with future distributions potentially shifting to a UBI model.

6. $RERRO
Used as a points system to track participation in the IRL RERRO Quest game at ETHDenver 2024.

7. $KONG
Created prior to KONG Land; originally imbued into Kong.cash notes. Considered an ā€˜honorary tokenā€™ of KONG Land. There is a $KONG/$CITIZEN Uni v2 pool.

L2 Fresh Start

On a previous community call, the idea of migrating our token ecosystem to a Layer 2 solution was discussed to enhance accessibility and utility. Base is attractive due to Coinbaseā€™s significant investment in onboarding its large customer base, its low gas fees, and its active ecosystem. This would make transactions more cost-effective and potentially boost token utility.

Benefits of Migrating to Base:

  • Consolidation: Simplify the token system by removing redundancy and complexity.
  • New Liquidity Pools: Create new liquidity pools on platforms like Aerodrome to boost visibility and liquidity. Establish a new liquidity pool for $CITIZEN upon migrating to Base to improve accessibility and trading efficiency.
  • Increased Attention: Leverage Baseā€™s growing popularity to draw more attention to KONG Land.

The low gas environment on Base would facilitate building new functionality and improving liquidity. However, such a large-scale migration involves several technical considerations that need discussion.

Technical Considerations:

  • Migration Process: Design the migration process to ensure seamless token conversion while maintaining the value of existing NFTs and managing liquidity pools.
  • Contract Upgrades: Upgrade smart contracts to handle the new architecture while maintaining compatibility with existing governance frameworks.
  • Cross-Chain Interactions: If token(s) need to be kept on Ethereum, implement a cross-chain mechanism to ensure smooth interactions between tokens on different chains.

Other Ideas to Add Value to KONG Land:

  • Staking System: Implement a system where citizens can stake their CITIZEN NFTs to earn $LAND tokens through a UBI-like mechanism, boosting the utility and value of $LAND and incentivizing citizen engagement.
  • Layer 3 Creation: Create a Layer 3 for microtransactions and KONG chipped applications, potentially enhancing token utility beyond current use cases.

Please join the discussion if you have any feedback or questions, or if you have new ideas to suggest. Your input is really important to moving forward on this - thanks!

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Good job listing all these out @brent-007, I appreciate you bringing up this issue thoughtfully and comprehensively!

I think itā€™s important to identify the positive things we want to do with the token rather than the negative things we want to take away from our current ecosystem. While I agree our current token ecosystem is needlessly complex, Iā€™m not sure that issuing a new token is the right way to make it simpler.

Based on the discussion, the key things that our token ecosystem need to provide are:

  • a token that identifies an individual as a citizen and voter of Kong
  • a method of granting temporary citizenship in Kong as a trial period or recruitment tool
  • a medium of exchange token to power chip-based commerce and reward citizens for contributing

Imho, $RERRO, $KONG, $CTZN, and $CITIZEN-ERC20 are dead tokens. To the extent that people who hold them should qualify for future $LAND drops or be able to convert to $CITIZEN-ERC721, I think thatā€™s the right method to consolidate our token list. I havenā€™t checked if any of our contracts are upgradeable, but maybe it makes sense to migrate them to $CITIZEN-ERC721 and give holders of these alt tokens a chance to mint out the remaining collection. Maybe we add a piece of metadata to the 721 that says whether the resident type is permanent or temporary, and we can eliminate $METIC too!

This leaves $CITIZEN-ERC721 and $LAND as fulfilling the features required above. Can we simplify this further with an L3 token on Base? I donā€™t think so, but maybe there is a valid usecase for having our own L3. Would $LAND become the gas token on KONG-L3? Since $LAND is restricted to $CITIZENs that would mean the L3 is CITIZEN-only. Would we make $KONG the gas token of KONG-L3? That could be a good solution for broader appeal, but it complicates the token list again, and then we have to question what does $LAND do that gives it value?

In the end, I think of an L3 as a way to accept a certain set of oracles as part of choosing to use the chain. You donā€™t need a Chainlink or Graph because youā€™re essentially trusting a centralized sequencer anyway. You might as well trust them to provide you with third party data too! So what are the oracles that we want to package together into KONG-L3 and how does that drive value back to $CITIZENs and $LAND?

ERS is a great idea weā€™ve had cooking for awhile, but Iā€™m not sure how it is improved by adding specific oracles or wrapping it in an L3. If we can figure that out, I will fully support a migration and redeploy.

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@cadillion thanks for your thoughts. We had a good discussion on the Citizen Forum about this.

I would generally agree that we probably should focus on the $CITIZEN-ERC721 (or a revised variant which allows for ā€œGreen Cardā€ like status) and the $LAND ERC20.

I would like to second the idea for a KONG Land L3; I think that there could be some aspects that strongly align with the OG KONG Land ethos:

  • KL3 would be self-sovereign blockspace for $CITIZENs and any with $LAND, supporting a broader mission of open silicon and compute free from gatekeepers
  • KL3 could be something that can only be run by $CITIZENs on home nodes ā€“ unlike most L3s today that simply live in Amazon data servers via services like Conduit (not to pick on Conduit, but I have no idea how I can run Degen chain at home)
  • $LAND would be the gas token for KL3 and validators would earn $LAND for participating
  • We could come up with a simple set of scripts (a la DappNode) for $CITIZENs to run their home nodes on $200-500 hardware (you can grab a refurbished mini Dell for that price!)

I do not believe we should run KL3 with the goal of subsidizing dapps or appealing to the general market but instead should recruit those we ultimately want as $CITIZENs: individuals who value decentralization and appreciate why our silicon and hardware play such a vital role in that goal.

I believe a primary use for KL3 could be recording (at very low cost) hardware-based attestations from HaLos (e.g. akin to EAS but just focused on those attestations from secure chips).

My support hinges on keeping the development efforts low by leveraging tools like Arbitrum Orbit.

@sicdev-pilnup would love your take here as well.

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  • KL3 would be self-sovereign blockspace for $CITIZENs and any with $LAND, supporting a broader mission of open silicon and compute free from gatekeepers

Iā€™m not sure L3 and self-sovereign go together, especially if the L2 is Base, but I agree that there are advantages to having control over the sequencer and the oracles. If weā€™re going to do an L3 on Base we should be clear about the advantages vs launching an IBC chain, a MOVE chain, or our own network a la LayerZero or Chainlink.

  • KL3 could be something that can only be run by $CITIZENs on home nodes ā€“ unlike most L3s today that simply live in Amazon data servers via services like Conduit (not to pick on Conduit, but I have no idea how I can run Degen chain at home)

Iā€™ve talked about this with Jacek, and part of the challenge right now is that nobody really has a RaaS product with a decentralized sequencer yet. There are proposals for sequencers with additional guarantees or alternative pricing, like Orbitā€™s TimeWarp proposal, but itā€™s all still research stage.

Chaindrop is a new OrangeDAO company offering self-hosted rollups and theyā€™ve indicated that theyā€™re making progress on this front, but I donā€™t know how ready for primetime they are.

  • $LAND would be the gas token for KL3 and validators would earn $LAND for participating

So do we grant citizenship to people who sign up to be validators or do they have to acquire citizenship by other means to join the validator pool? Or do we let them collect $LAND but not be able to transact with it unless they have the CITIZEN-721 token?

I do not believe we should run KL3 with the goal of subsidizing dapps or appealing to the general market but instead should recruit those we ultimately want as $CITIZENs: individuals who value decentralization and appreciate why our silicon and hardware play such a vital role in that goal.

I think itā€™s hard to launch an L3 without offering support for basic services like blockexplorers, bridging, dexs, as it adds a lot of friction to deploying capital or exiting the asset. We should be clear about the size of the lift that accompanies an initiative of this nature, and that there would need to be some kind of incentive program for developers to spend time and effort on KL3.

My support hinges on keeping the development efforts low by leveraging tools like Arbitrum Orbit.

Having talked to some people who have deployed on Orbit, I think there are more advantages right now to being in the OP Superchain ecosystem, especially if you want to launch on Base, but overall my earlier point about being clear on the advantages of L3-mania vs other ecosystem plays stands.

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Fair point, the entire notion of L3 is that we would be giving up sovereignty to the base L2 and chain (it might be better to compare this with the cities<>states<>countries tiers of sovereignties concepts weā€™ve talked about before).

Iā€™m actually technology agnostic on this; my goals would be:

  1. Block space we control, although we may or may not have dependencies give the stack choice (L3/L2/Cosmos chain)
  2. Direct $CITIZEN participation in the network through running ā€œXā€ nodes ā€“ this maybe validators, miners, decentralized sequencers depending on this technology chosen
  3. Leveraging $LAND to reward participants and requiring $CITIZENship for node participation; participants would need to acquire this on their own. I would still have a path for $CTZN/$CITIZEN burns to the ERC721 (with the outstanding supply). A possible alternative would be that anyone needs a HaLo to run a node (and the HaLo is where the validator key pair lives)
  4. Using the resulting chain for some base use case that is tied to KONG Land in a meaningful way (e.g. hardware attestations)

I agree that we would need some basic additional infrastructure ā€“ a block explorer and bridge ā€“ however, from there I think that we should keep things minimal.

My thinking here is an extended hackathon project rather than a massive professional investment; I would opt for having most of the time will go into choosing the specific architecture rather than implementation (e.g. we are leveraging as much off the shelf as possible).

All of this is really ā€˜food for thoughtā€™ as opposed to something fully baked, but in my opinion would be we have more fun by looking at this as an experiment rather than get too caught up in building the perfect L3 (so long as point #2 above holds).

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As a recap from our last senate meeting on this subject:

  • Find a set of FOSS packages that will help us host a minimum viable L1 or L3 for the purpose of playing with and experimenting on ideas that support open source hardware and trustless manufacturing
    • Maybe this includes a Dappnode/Umbrel/Start9-like miner that requires a green card to activate
    • Maybe this includes an attestation service that specializes in hardware attestations
    • Maybe this includes a Blast-like interface where clients lock-up ETH on L1 and the funds are immediately converted to LRTs which earn yield while the user is bridged to KONGchain
    • Maybe this includes trusted service manager (TSM) staking with slashing for bad deliveries or bad goods
  • L3 ecosystems may not be super mature from a FOSS standpoint, so something that enables multiple clients to contribute to the indexer/DA layer is preferable
    • Additionally, experience with vendors has shown that a solution like Conduit/Caldera/Alchemy can easily cost in the $3k-$50k/mo range depending on blob storage and throughput requirements
    • There is something to be said for having an L1 that posts block hashes to an L2 and calls itself an L3, as thereā€™s no real definition here
  • The priority is something lightweight that is easy to tweak, and not necessarily something that is full-featured from the perspective of a bridge/dex/blockexplorer suite of contracts and clients
  • All dynamics should point new holders toward $LAND and $CITIZEN-721, and de-prioritize the other tokens in the ecosystem.

Let me know if I missed or misrepresented anything.

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