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Karma Token Utility

With Karma, users can make commission payments within the platform.

Some of the main drivers of the growth of token price include:

  • “The Karma token is used as payment for all commissions in the ecosystem: scoring, transaction processing, insurance, collection and others.
  • Participants of transactions will buy Karma tokens through the exchange automatically.
  • The greater the volume of transactions in the ecosystem, the greater the amount of commissions, the higher the demand for Karma tokens.
  • If you keep the total number of tokens and demand increases, tokens will grow in price.
  • With the growth of the rate, the number of those wishing to buy tokens will grow,
  • creating an additional supply deficit.
  • Unlike BTC or ETH, the absolute size of the commission will not grow in proportion to the price of the token. If the rate of the Karma-token has doubled, then people will pay half as many tokens for the same amount of commissions.”

Source: Karma

The average volume of commissions in relation to the whole volume of transactions, according to preliminary estimates, would be in a range between 2 and 7%.

Forecast of economic development: 2017 2020 2025
The volume of transactions per year, USD 5M 1B 15B
Commissions vol. (demand for tokens), USD 250k 50M 750M

Source: Karma

For investors who hold more than 100K tokens, they have some special opportunities.

One of the main opportunities for these holders is access to the dark pool.

  • Dark pools have been operating on the stock exchanges for more than 50 years and could be a great opportunity for users conducting large transactions.
  • New applications for loans and investments would first go to the dark pool, allowing investors with over 100K tokens to get a first look at potential investments.
    • If within X numbers of days, none of the holders of the tokens selects the application, it is placed in a public pool.
    • The holders of the tokens receive exclusive primary access to information about the most available long-term capital and the most profitable and reliable applications for loans.
  • If several holders of the tokens (more than 100K) simultaneously want to take an interesting request, the one with the most tokens wins.
  • In the future, Karma plans to develop a system with multi-level access to the closed pool. Basically, the more tokens a person owns - the more priority access to applications one has.

Investors with over 100K would also receive discounts on commissions within the platform. These holders could receive up to 50% on commissions within the platform. Moreover, they have access to voting rights. The top 15 delegates (participants, to whom holders of tokens delegated the right to make decisions) openly make decisions about the implementation of new versions of the project. They may play integral roles in updating commissions, analyzing additional issues, updating the business logic of the application.

In order to maintain the rapid rates of development of Karma, additional resources are needed. Karma’s experienced team aims to attract new resources through the sale of new tokens. The current holders of tokens would benefit from the sale. This is due to the fact the development of the platform would lead to an increase in the number of internal transactions coupled with a smooth increase in the price of the token and an increase in the liquidity of the token on the exchange.

Karma plans to release new tokens congruent to the performance of the targets for the development of the platform based on its roadmap. Here’s a look at Karma’s roadmap:

Source: Karma

One of the functions of additional emissions is to mitigate the growth of the value of the token and expand the number of participants in the ecosystem to improve the token’s stability and reduce volatility.

According to Karma, “The order and conditions for the release of new tokens can only be changed by negotiating with the 15 largest delegates of the community (see the dPoS device).”

Time after the token sale (estimate) 1year 1.5 years 2 years
Transactions vol. on the platform per year 50M USD 150M USD 300M USD
Number of tokens in circulation 3B. 3.5B. 4B.
Additional emission vol. in tokens 0.5B.
Estimated token exchange price 0.02 USD 0.06 USD 0.12 USD
Funds raised 10M USD 30M USD 60M USD

Source: Karma

Now that we went over Karma’s token utility, let’s take a look at how Karma manages potential legal issues with cross-border payments and contracts and the legal status of the token.