This article explores how the Kyoto token builds value by scaling its economy, blockchain, and ecosystem through a positive feedback loop facilitated by Kyoto’s business DePIN application.
The Evolution of Token Economies
Over the years, Bitcoin has demonstrated its unique ability to establish and expand a secure network, leveraging its distinctive economic framework. This has not only drawn billions of dollars in liquidity but also sparked global interest in cryptocurrencies. The cryptocurrency industry, alongside supporting token economies, has progressed technologically, attracting a broader audience with innovative trends like NFTs and DeFi. These trends have spurred new-age token economies, which rely on external revenues generated through technological offerings. The advancements in this sector have given rise to a new generation of token offerings.
Introducing The Kyoto Token
The Kyoto token is a multi-utility token built to perpetually support and be supported by Kyoto’s climate technology offering. It is the governance token of the Kyoto Network, a revenue generating network that brings to market a pioneering blockchain-driven digital carbon credit. The sale of these carbon credits generates revenues that support the Kyoto token, network and carbon supply chain.
This is important to note since a market vertical that Kyoto connects to for its DePIN application is the Voluntary Carbon Market (VCM); a market similar to cryptocurrency which is in its infancy but which has already experienced explosive growth in recent years. Currently the VCM is transitioning to a more accessible market by digitising aspects of the supply chain, to eventually become more efficient and interoperable amongst standards. This inevitably means that the VCM will find blockchain and Web3. We are already seeing a surge in Web3 protocols entering into the carbon markets and Kyoto aims to become the intersection technology to support and scale the VCM during this transition. To put things into perspective, this graphic illustrates the potential growth of Kyoto (and ignoring other market verticals Kyoto is connected to).
The Kyoto Flywheel: Scaling the Kyoto Economy
Decentralised Physical Infrastructure Networks operate on a flywheel model that encompasses their technology offering, establishing a positive feedback loop to bolster the network and token. This same principle applies for Kyoto. Illustrated below, the Kyoto Flywheel shows how the blockchain supports the business application, which in turn supports the blockchain. This creates a desired positive feedback loop with a circular economy. The Kyoto DePIN infrastructure is strategically designed to channel revenues and liquidity into the Kyoto blockchain. Particularly in volatile markets and amidst the speculative risks associated with cryptocurrency, protocols with reliable revenue streams become more appealing to token holders, as they enable the development of protocol treasuries without solely relying on community investments.
The revenues generated build more value for Kyoto token holders through multiple methods: building the Blockchain ecosystem treasury, Grant programs, Hackathons, increasing token liquidity, generating more carbon assets and reducing token supply, just to name a few.
Bringing End Users to the Kyoto DePIN Economy
Whilst Kyoto token holders play an integral part in the entire offering, a DePIN relies on external customers, meaning the product needs to have a market fit. Fortunately, Kyoto aligns perfectly with market demands. There has been a shift in how corporations approach sustainability, which is helping to bolster the VCM. One confirmed aspect is the desire of purchasing companies to continue to engage in the VCM to offset carbon emissions. The search for high integrity carbon credits that can be generated cost-efficiently is only just starting. This market data point affirms the potential for Kyoto’s offering.
Kyoto Supply Distribution
Similar to Bitcoin, the Kyoto token has a fixed maximum supply that it can never exceed (750m $KYOTO). Unlike some tokens, there was no pre-mine for the Kyoto token. Instead, 14% of the total supply was sold via a fair launch in June 2022, establishing an initial decentralisation for the token supply. As of the 27th June, Kyoto’s mainnet launch, 10% of the total supply (75m $KYOTO) will be available for public sale. Additionally, the 14% of supply owned by the pre-sale participants will be vested linearly over 18 months, here’s a further breakdown of supply.
How the Kyoto Token is Bringing More Users and Liquidity to Web3 and Crypto
As the cryptocurrency sector attracts a growing user base of investors seeking alternative investments, the sustainability of a token and its underlying blockchain relies heavily on generating revenues beyond its speculative value. As the cryptocurrency market becomes more saturated, retaining a token holder is becoming increasingly difficult. However, projects that effectively generate revenues and enhance the value of their tokens naturally attract more users, thereby contributing to the decentralization of the token economy.
What makes Kyoto unique is its ability to sell carbon credits to both Web3 and non-Web3 users. This unique approach ensures that Kyoto does not rely solely on competing for liquidity within the Web3 space for the revenues supporting Kyoto’s ecosystem. By using its technology offering to reach non native Web3 users, Kyoto brings liquidity and users who might not otherwise actively participate in Web3 and cryptocurrency.
In Summary
Whether you are a cryptocurrency speculator or just simply interested in emerging markets in Web3, Kyoto and its DePIN application is a unique offering to watch over in the next few years. If the team and project successfully achieves their goals and emerge as leaders in transforming the VCM and scaling regenerative finance, the potential for its market cap to exceed billions of dollars in value is considerable.
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