FAQ

How is the value of Ktoken calculated?

At the launch of the protocol, 1 Ktoken = 1 USDC.

Now, the amount of money in the treasury divided by the number of outstanding Ktokens.

The amount of money in the treasury consists of two parts, ~80% is in this wallet, doing nothing. The remaining 20% is off-chain, actively being traded. We periodically ping the value of this remaining 20% so that we can update the value of the treasury and potentially rebalance the 80/20.

Why is this not a ponzi scheme?

Let's first consider what a ponzi or a pyramid scheme is. Copied from investopedia.com: "A Ponzi scheme is a fraudulent investing scam which generates returns for earlier investors with money taken from later investors. This is similar to a pyramid scheme in that both are based on using new investors' funds to pay the earlier backers.

Both Ponzi schemes and pyramid schemes eventually bottom out when the flood of new investors dries up and there isn't enough money to go around. At that point, the schemes unravel."

Visionary does not take money from new investors to return to the old investors.

Visionary makes money by active treasury management, practically day trading a portion of its treasury. This is highly risky and does not guarantee returns.

However, when there are returns and people make money, Visionary takes a performance fee. The referral model is simply paid out of this performance fee.

If a user does not refer any new investors, that's not a problem. That user will still make the same returns as other users do.

Want proof? Look at our wallets. You will be able to see ~80% that is on-chain. The remaining 20% is off-chain. The 80% is kept in sight so everyone sees we're not doing any funny business with it.

Why is this in crypto?

We want to be as accessible for everyone as possible. Crypto allows everyone in the world to make use of it.

Second, we want to be as transparent as possible. Being on the blockchain, everyone can check our books in real-time.

How safe is it?

Our treasury makes money by actively day trading it. This might as well go really bad. In that case we lose our 20%. In that case, the value of the treasury (and thus the coin) drops. We will then allocate another 20% out of the remaining 80% (now the new 100%) to trade again.

In other words: This is no free lunch. You will have a risk that you can lose your investment.

Don't do this with your complete savings. Only do this with money you could lose.

That being said, we do try to mitigate our risks:

• We actively try to do as much on-chain as possible, so everyone can follow. Check out our wallet, so you can verify that we really do nothing with our remaining 80%.
• Regarding our trading: Our bet size is approximately 1% each time, we are running up to 20 bets at a time.
• When we want to move any funds manually, this will require 3 different signatures. Multi-sig will reduce the risk of social engineering / weakest link.
• We use oracles as 'cache' for the treasury counts, and thus also the exchange rates. These rates expire when not updated, which prevents wrong rates during network outages. We also have a network of different oracles, updated via different hosts, that should prevent potential network outages and invalidate potential attacked oracles.

What happens to my money?

When you buy Ktokens with your USDC, you are basically creating/minting them. When you sell them, you destroy/burn them. The value of each Ktoken remains the same with or without your USDC, we just create/destroy Ktokens.

80% of the total USDC in the wallet does nothing. We work with 20% of the total treasury. We move this off-chain. We periodically update the value of this investment so we know the value of Ktoken to USDC.

Is there a lock-in period, a staking period, or anything like that?

No. There's no lock-in period at all. You could withdraw your money at any time.

What prevents a potential bank run?

A bank run occurs when the money is being deployed elsewhere and is not liquid enough to give back to its owners. This creates panic, and then accelerates like a snowball until the bank is typically insolvent.

We only work with 20% of the investment. So 80% of the money can be withdrawn instantly without a problem.

It's important to realise that this does not destroy the value of each Ktoken. The value of the total treasury goes down, but every sale basically means destroying a Ktoken.

Therefore, this should not create a panic.

But, since we're doom-thinking here. Assuming we need instant access to the remaining 20% as well, and assuming in the worst case, the remaining 20% could all be stuck in trades. In this case we will try to divest these trades and return the money so that the balance is back to 80/20. This will take up to 2-3 days maximum.

What happens if you guys go offline?

If we, as founders, would all disappear for some reason, the 20% that is currently off-chain could remain off-chain. In the worst case you would lose the value of the off-chain part.

However, as founders, we are heavily incentivized to return the 20% so that we can earn the performance fee, which is greater over the long run.

An example, if the value of Ktoken increases by 5% a month, and we have a 1M treasury on Jan 1, that 1M would be 1.8M by Dec 31. We would be making 240K in performance fees when people cash out on Dec 31. This is assuming the fund is not growing in deposits either, only trades. In our opinion, we believe we can make a lot more money with the performance fee and have a happy long life with good karma, than rugpulling/stealing the 20% off-chain and have a sad, short life with bad karma.

That being said, we are also humans so we do take holidays from time to time. We may not trade every day. In other words: We have a life too. When we go on breaks for longer periods of time, we return all the money back on-chain before going offline. Note: During our holidays, the value of the Ktoken should not change.

Why aren't you guys listed on any exchange?

We might at some point be listed by someone. There are several decentralised exchanges that anyone can offer any coins. However, at this point we do not see the value in it ourselves.

What are the costs involved?

There are 2 fees:

1. When you buy, you pay a 1% buy tax.
2. You will pay a 30% performance fee whenever you make a profit.

Example:

Assume you want to invest 1000 USDC into Ktokens.

Why do you have a buy tax?

Each time the 80/20 risk balance is disturbed, our aim is to rebalance it.

This requires a transaction, and transaction costs resources.

To prevent rapid buying & selling, we introduce a buy tax. This reduces the strain on our systems.

Note: The buy tax is currently at 1%. In case of excessive volumes that deem unfavourable to our ecosystem, we can temporarily move this up to 5%. As it's a buy tax, this would only affect new buyers.

What happens if I transfer my Ktokens?

You can transfer your tokens to someone else. However, there is still a performance fee to be paid. When you transfer to another account, we will first deduct the performance fee, before we send it to the new recipient. The recipient will receive the Ktokens against the current exchange rate.

We would like to prevent the following scenario: Imagine Jackie sends Rudy 10 Ktokens. These 10 Ktokens are now worth $100 each, so totalling $1000. Rudy sees she is getting $1000. However, Jackie bought these 10 Ktokens originally for $100 in total. So Jackie actually made a profit, the value of her portfolio went from $100 to $1000, or $900 profit. If Rudy were to cash out, turning the $1000 Ktokens into USDC, she would have to pay 30% performance fee over the $900 profit. You can imagine, there are certain scenarios where this can lead to confusion.

To prevent these scenarios, when you transfer Ktokens, you will first pay the potential performance fees. Once that's done, the recipients gets Ktokens against the current value. In our example here, where Jackie wants to send Rudy 10 Ktokens, Jackie will find out that she needs to pay 30% performance fee first. After paying those, she has $100+$900*70%=$730 left. She can now send Rudy 7.3 Ktokens against the current price.

What are the risks of Ktoken?

We have several risks:

1. We could lose money with trading, thereby devaluing the coin
2. Smart contract risks: Someone could find an exploit to our contracts, stealing money
3. Team might go offline

Who is behind this?

Ktoken has 4 founders. We prefer to keep anonymity as we want to lead normal lives next to this.

We hope we can create trust & goodwill by having most of the treasury on-chain, so people can verify it all the time.

Don't trust us? First: Don't invest. Second: Do your own research if you're interested. Then, only invest what you could lose.

What does it mean to be permissionless?

It means we cannot give or withdraw permissions to/from users - we simply do not have this control. Anyone with a NEAR wallet can interact with our protocol. We find this 'freedom' to be a very important right.

Why is your code open sourced?

Professional traders typically work for larger hedge funds where a large minimum investment is required. We help these professional traders access a larger public. In return, the public is always seeking for better investments. Our software connects them.

We made it open source so that starting a fund is easier for everyone. We strongly believe this is better for the public. Next to that, developers can spot bugs quicker this way, hence it adds to the security and stability of our protocol and thus our user's funds.