# 6. Governance and Tokenomics

## 6.1 Governance Overview

KTON follows a progressive decentralisation model.

### Voting Power

| Token     | Purpose                            | Voting Weight     |
| --------- | ---------------------------------- | ----------------- |
| **$KTON** | Liquidity token & governance power | *1x* (per jetton) |

### Core Modules

* **Parameter Committee** — Adjusts APY targets, fees, withdrawal buffer.
* **Operator Committee** — Whitelists / slashes node operators.
* **Treasury Committee** — Allocates budget for audits, liquidity mining and R\&D.

All modules operate under the **Timelock Executor** described in Chapter 5.

## 6.2 Token Supply & Distribution

*KTON does not employ a separate governance token at this stage. Voting rights and economic exposure are both represented by **$KTON** itself. Therefore, no additional token supply schedule is required.*

| Allocation       | Notes                                    |
| ---------------- | ---------------------------------------- |
| Staking Rewards  | Reflected via $KTON exchange-rate growth |
| Treasury Reserve | Managed by DAO using $KTON inflows       |

## 6.3 Fee Model

* **Validator Rewards Fee:** A configurable share (set by DAO) goes to treasury.
* **Instant Withdrawal Fee:** Dynamic fee; its distribution between burn and treasury is determined by governance.
* **MEV Rewards:** Split between node operators and nominators based on a DAO-approved formula.

## 6.4 Treasury Management

Treasury assets (TON, KTON, USDT) are held in a **multisig wallet**. Expenditures require DAO proposal approval and timelock execution.

Typical budget items:

* Security audits & formal verification.
* Liquidity incentives (DEX pools, lending markets).
* Ecosystem grants for wallets, analytics, DeFi integrations.
* Community marketing & hackathons.

## 6.5 Road to Full Decentralisation

| Phase | Milestone                        | Control Level       |
| ----- | -------------------------------- | ------------------- |
| Alpha | Mainnet launch, Council multisig | Centralised         |
| Beta  | Governance token distribution    | Hybrid              |
| Gamma | On-chain voting live             | Decentralised       |
| Delta | Sub-DAOs activated               | Fully decentralised |

Next: **7. Security and Audits**