$KERB is the utility token for Kerb Finance. The main utility of $KERB is governance in the Kerb DAO. $KERB is also used as a reward for Kerb finance asset holders.
The profits of the Kerb Finance exchange will be allocated as dividends to $KERB holders similar to how dividends are allocated to share holders in contemporary companies.
To ensure fair participation in governance and to adhere to the path of Kerb being a community governed DEX for real world asset trading, $KERB has been designed to be completely decentralized. Initially it will be equipped with a centralizing factor by allocating 25% of the $KERB supply for the team but, this supply is time bound with a time period of 10 years (referred to as the hand holding period). This is done to ensure that the team has influence and is able direct Kerb Finance until it is prepared to be sustainably managed by the DAO. After 10 years it is compulsory for the team to liquidate their holdings and transfer the power shift of management to the DAO.
Every month Kerb Finance smart contracts will execute buybacks of $KERB from the market. Particularly, a certain percentage of total transaction fees will be utilized to buyback $KERB (initially set to 30%). From the re-acquired $KERB, 20% will be burnt, causing deflation as well as an increase in token rarity and voting power. The remaining 80% of bought back tokens will be utilized to reward the Kerb Finance asset holders. Although the initial total supply of $KERB is 1,000,000,000, the buyback to burn with 20% ratio provides a deflationary aspect improving the value and rarity of the $KERB token.
As the token supply decreases, the allocated percentage for buying back $KERB from the market will decrease in accordance with the table below:
Kerb Finance’s buyback, burn and rewards mechanism leads to the perpetual redistribution of the $KERB token back to the community, thus maintaining a high decentralization factor and ensuring that the $KERB token which bears voting rights - thus bearing the power to decide the future of Kerb finance, is in the hands of the community.
As mentioned, every month Kerb Finance smart contracts will buyback $KERB from the market. From the bought back $KERB, 20% will be allocated for burn and 80% will be allocated for re-distribution as rewards to Kerb finance asset holders. More specifically, $KERB is utilized as dividends for asset holders on the Kerb Finance platform to incentivize users to hold assets and earn yields. Since rewards tokens are provided from buy backs from the market and not minted from thin air, the APRs provided to Kerb Finance asset holders have real USD stable coin backing, unlike prevalent DeFi protocols, where reward tokens are minted and APRs are calculated according to the current token price (ignoring the inflationary effects of an increased token supply on the aforementioned token). This is how Kerb Finance ensures to provide a deflationary token as rewards.