Rethinking KUNAI Emissions: What We’re Proposing and Why

We’ve spent the past weeks going through KUNAI’s supply mechanics line by line, using on-chain data rather than the projections we published at launch. What we found changed our thinking, and we want to put the whole picture in front of you before we act on it.

This post covers where we are today, what we’re proposing to change from 1 September 2026, what it gains, and, just as importantly, what it doesn’t fix.

Where We Are Today

KUNAI staking currently pays 19% APR, following the schedule we published at launch: stepping down one percentage point a year to 15%, then to 10% from year ten.

Alongside that, two mechanisms reduce supply:

1. The Stake-Burn Programme: Committed 10 million KUNAI across five wallets, one of which is unstaked and burned each year. Two are done. Three remain, holding 2 million KUNAI each.
2. The Node Buyback: Runs eleven validator nodes whose KLV rewards are used to buy KUNAI on the open market and burn it. This is the one part of our tokenomics funded from outside the token itself. No KUNAI is minted to pay for it.

Effective Maximum Supply Update:

We have moved 4,027,846 KUNAI to the blackhole address over the years. Those tokens are permanently gone, which means our effective maximum supply is 145,972,153 KUNAI, not 150 million.

The Problem We Found

Two things became clear once we put real numbers against the model:

1. The Stake-Burn Programme Burns Less Than It Appears

The reserve is staked, so it earns rewards while it waits to be burned. Across the full five years, we burn 10 million but mint 6.3 million in rewards along the way. The net reduction is 3.7 million, not 10 million. That was in our published table all along—the two columns were simply never netted against each other.

2. The Supply Growth Cliff

After the third remaining burn, nothing offsets emissions except the node buyback. Under the current plan, annual net supply growth jumps from roughly break-even to over 1.6 million tokens a year. We drew that cliff into our own schedule five years ago without drawing what catches it.

The Honest Framing: At current staking levels, our node buyback covers about 7% of what we emit. We cannot buy our way out of that gap. Reaching full coverage would take roughly 149 nodes instead of eleven, which is not a realistic use of capital. The answer has to come from the emission side.

What We’re Proposing

We are proposing two changes, both effective from 1 September 2026:

1. Monthly APR Reductions: One percentage point off the APR every month, from 19% down to 10%. This spans nine steps, reaching 10% on 1 June 2027. We are taking a gradual approach rather than a single move because a nine-point cut is a shock, whereas nine small steps are not. Additionally, each step gives us a measurement point: if staking participation starts falling, we’ll see it early and can pause rather than discover it at the end.
2. Immediate Full Reserve Burn: Unstake the remaining 6 million KUNAI stake-burn reserve now and burn it in a single transaction. Same tokens, same commitment, executed earlier. Because the reserve stops earning rewards the moment it is unstaked, this move alone prevents 2.2 million KUNAI from being minted over the next three years.

What This Gains

Here is how the proposed changes compare to the current plan over a five-year horizon:

Key Takeaways

• Zero Extra Cost: We burn exactly the same amount in both plans. The ~5.4 million token difference comes entirely from emitting less. It is the same 6 million tokens moved earlier, combined with a lower rate.
• Supply Shock Reduction: Circulating supply drops from roughly 34.1 million to 29.2 million within the first month. It will take close to seven years before circulating supply returns to where it stands today.
• 5-Year Horizon Focus: We have deliberately modeled five years rather than ten. Beyond that horizon, assumptions carry more weight than arithmetic, and we would rather present a shorter projection we can stand behind.

What This Doesn’t Fix

We would rather say this ourselves than have someone work it out independently:

• Supply Still Grows After Year One: At a 10% APR, the structural increase remains around 825,000 tokens a year. Our buyback covers about 11% of that. The gap is smaller than before, but it is still a gap, and this proposal buys time rather than closing it completely.
• Revenue Side Work Needed: To hold supply flat at 10% APR, we would need to buy back roughly 17,800 KUNAI a week. We currently manage around 1,900. Closing that requires revenue running through the buyback that doesn’t exist yet. That’s the honest next problem, and we’d rather name it now than present this as a complete solution.

Potential Buyback Growth Factors

Our buyback is funded by KLV validator rewards, so it scales with activity on KleverChain. If the network grows, those rewards grow, and the amount of KUNAI we buy and burn each week grows alongside without us changing anything. Adding nodes has the same effect.

However, that is a variable, not a plan. It depends on a network we don’t control, and we have no way to predict its timing or scale. Every figure in this post assumes the buyback stays exactly where it is today (around 1,900 KUNAI a week). If it turns out higher, the numbers improve—we would rather be wrong in that direction than build a proposal on unpromised growth.

What We Could Lose

1. Stakers May Leave: Cutting from 19% to 10% is a real reduction, and some holders staked at the higher rate. We believe the gradual approach limits damage, and current participation gives us room, but we cannot promise nobody unstakes. If participation drops significantly during the step-down, we will pause and reassess rather than push through.
2. Less Yield for Long-Term Holders: There is no way to present this otherwise: tokens we don’t emit are tokens stakers don’t receive. However, yield paid from dilution isn’t real yield—it comes directly out of the value of what everyone already holds, including the stakers receiving it. Emitting less at a lower rate is, over time, worth more than emitting more at a higher rate.
3. Changing Published Terms: We committed to a schedule and we are proposing to change it before it ran its course. We think the reasoning holds, but we recognize that changing rules midway carries a cost to trust.

What Happens Next

Everything detailed above is fully verifiable on-chain:

• The stake-burn wallets, blackhole address, and buyback transactions are all visible on-chain.
• KleverScan now separates permanent blackhole burns from reversible contract burns, so explorer metrics match these numbers directly.

We will publish the burn transaction when it occurs and broadcast the updated APR at each monthly step, allowing the schedule to be verified against reality.

We welcome all questions, including skeptical ones. If you find an error in our numbers, please reach out and let us know.

Figures measured on-chain as of 16 August 2026.

Nothing in this post constitutes investment advice or a prediction regarding token price.