Klima’s relaunch will bring a major update to its token ecosystem, with the introduction of the new $KLIMA and $KlimaX tokens. We’ll be using a staking system with a “last man standing” mechanism to allocate these. Our aim is to ensure a fair launch that incentivizes current $KLIMA holders to commit to the long-term success of the Klima 2.0 ecosystem.

This article will explain a little more about how the transition will work, but TL;DR: stake your $KLIMA early and keep it staked for the full duration for maximum benefits.

Dual Token Model

Klima 2.0 will feature the upgraded $KLIMA and a new token, $KlimaX.

$KLIMA is a dynamic carbon index token. Unlike legacy $KLIMA, it will reflect the entire diversified carbon holdings held in the Klima Protocol. Initial supply will be 20 million $KLIMA, though this may change as the protocol’s carbon reserves grow.
$KlimaX is the economic governance token for Klima. It provides voting rights over carbon portfolio management, protocol revenues, and future protocol development. It will have a fixed supply of 100 million $KlimaX.

17.5 million $KLIMA and 40 million $KlimaX will be allocated via a staking system that encourages early and long-term participation, and enhances value for existing $KLIMA holders. Overall, the transition is expected to take around six months. Today we’re pulling the trigger on that process!

As we trailed in our recent Office Hours and “Six Big Changes Coming With Klima 2.0” article, this has now officially kicked off with the deployment of the fair launch contract on April 3. There, on Monday, 7th of April at 2 pm EST, follows a fair launch staking period, in which participants will accumulate points based on their staked balance, entry time, and duration of participation. While participants can withdraw their stake any time they want, a burn mechanism will create increasing exit costs, driving further value for those who maintain their position. A final redemption period will see the new tokens created and distributed to stakers in proportion to the points they have accrued.

Here’s how it’s all going to work in a little more detail.

Staking Multipliers

We’ve designed the staking system to reward holders who are truly committed to Klima 2.0. There are three interconnected mechanisms that achieve this.

1. Entry multiplier

Week 1 participants gain a 2x multiplier. Week 2 participants receive 1.5x, and anyone who stakes after that gets the standard 1x multiplier.

2. Time-based compounding

A daily multiplier means that points accrue exponentially with longer participation.

Total Points on Day x = Staked Amount × e^(0.00274 × Days) × Entry Bonus

Where “e” is the mathematical constant approximately equal to 2.71828.

3. Burn mechanism

Full or partial withdrawals of staked $KLIMA are available before the end of the staking period, but users will lose all of the points associated with the withdrawn stake. Those points are instead redistributed to those who maintain their stakes.

In addition, a percentage of the withdrawn $KLIMA is burned. The fee consists of a 25% base burn, plus a time-based burn that increases linearly from zero to 75% by day 365 (though theoretically possible, the staking period is expected to be less than 365 days). This reinforces the “last man standing” dynamic and progressively discourages unstaking as time goes on.

Examples

Let’s take a look at some different scenarios.

Alice starts with 10,000 $KLIMA and begins staking on day 1. She receives the 2x bonus for week 1 stakers, and so receives 10,000 x e^(0.00274 x 1) x 2 = 20,055 points by the end of day 1. By the end of the 90th day, she has earned 1,000 x e^(0.00274 x 90) x 2 = 25,593 points.

Bob starts with 5,000 $KLIMA and begins staking on day 8, at the beginning of week 2, therefore receiving the 1.5x bonus. By the end of the first day, he has received 7,521 points. By the 30th day, this has increased to 8,143 points.

Bob then decides he wants to withdraw his entire stake to sell it, as the price of $KLIMA has risen. Bob loses all of his points, which are allocated to remaining stakers. Out of his initial 5,000 $KLIMA, 25% + 75% x (30/365) = 31.16% are burned, meaning he withdraws 3,442 $KLIMA.

Points scores are updated in real time. A dashboard for tracking points is live at https://app.klimaprotocol.com/

In short, the simplest way to maximize points and your allocation of $KLIMA and $KlimaX is to stake now, and leave your tokens staked right to the end.

Final Points Calculation And Token Distribution

The staking period ends after the Klima Protocol is ready to deploy, at which point we will prepare for the distribution of the new $KLIMA and $KlimaX tokens.

Week 1: Finalizing calculations

At the end of the staking period, all remaining staked $KLIMA will be permanently frozen in the staking contract. No other staking or unstaking actions will be permitted.

Points calculations will be finalized. These will be used to allocate a proportional share of 17.5 million KLIMA and 40 million KlimaX. For example, if a total of 25,000,000 points are distributed among all $KLIMA stakers, then a participant who accrues 25,000 points (0.1% of the total) would be allocated 17,500 $KLIMA and 40,000 $KlimaX in the new protocol.

Week 2: Audit and token contract preparation

We will then publish the thorough audit of the distribution calculations, alongside the new $KLIMA and $KlimaX token contracts. Final token allocations will be announced to the community for transparency.

Week 3: Deployment and claims

The new token contracts will be deployed on Base network, and we will enable the claiming mechanism. Participants will begin to receive their new tokens.

Week 4: Completion and Transition

In the final week of the process we plan to open claims on new token distributions and transition the Klima Protocol to support the new tokens. This includes initiating the new market-based carbon pricing system using $KLIMA and $KlimaX.

For step-by-step information about participating in the transition, see the Klima Token System Transition Plan or swing by the Klima Discord to ask any questions you might have.

Stake your $KLIMA now! The more $KLIMA holders participate, the stronger start Klima 2.0 will have. Our friends and community are hard at work spreading the word, so don’t forget to like and share this post!

Stake It To Make It: The Transition To Klima 2.0 Begins!