[Temp Check] Responding to RingDAO’s Proposal and Phasing Out RING Deposit for KTON

[hackfisher]

Summary

This Temp Check proposes that KtonDAO responds to RingDAO’s recent proposal to further unwind the cooperation between RingDAO and KtonDAO.

In response, KtonDAO should simplify and phase out the existing “RING Deposit for KTON” mechanism, stop accepting new RING Deposits for KTON issuance, and gradually sunset the related Kton Staking functions.

Existing users should remain protected during the transition. Withdrawal, unstaking, and reward claiming functions should continue to be supported for a sufficient period.

Reference: RingDAO discussion
https://github.com/orgs/ringecosystem/discussions/49

Background

The “RING Deposit for KTON” mechanism was originally created as part of the cooperation between RingDAO and KtonDAO. It allowed users to lock RING and receive KTON, while KtonStaking was supported by annual RING incentives from the RingDAO Treasury.

RingDAO has now proposed reducing the Current Annual Incentive for KtonStaking from 20M RING per year to 0, in order to reduce treasury deficits and recurring expenses.

Since the RING Deposit for KTON mechanism and KtonStaking are closely connected to this cooperation, KtonDAO should also consider simplifying and winding down the related protocol functions.

Motivation

The goals of this proposal are to:

1. Respond constructively to RingDAO’s proposal.
2. Reduce KtonDAO’s dependency on RingDAO Treasury incentives.
3. Stop new KTON issuance from the RING Deposit mechanism.
4. Simplify the KtonDAO protocol and frontend.
5. Protect existing users during the transition.
6. Allow KtonDAO to explore future KTON utility and tokenomics independently.

This proposal does not mean KtonDAO is abandoning KTON. Instead, it means KtonDAO should move away from relying on continuous RING incentives and old deposit-based issuance models.

Proposed Changes

1. Stop New RING Deposit for KTON

KtonDAO should stop accepting new RING Deposits that generate KTON.

The frontend entry for creating new RING Deposits should be removed or disabled.

2. Keep Withdrawal Support for Existing Deposits

Existing RING Deposits should remain withdrawable according to their original lock terms.

Users who already participated should not be forced to exit early, penalized, or lose access to withdrawal functions.

Deposit withdrawal should remain supported for at least 1 year, or until all existing deposits have expired or can be migrated.

3. Phase Out Kton Staking

As RingDAO’s annual incentive to KtonStaking is proposed to be reduced to 0, KtonDAO should gradually phase out Kton Staking.

The proposed approach is:

• Stop accepting new KTON Staking positions.
• Keep Unstaking available for existing users.
• Keep Claim functions available for already accrued rewards.
• After the transition period, retain only the minimum functions needed for user exit and reward claiming.

4. Simplify and Close Related Proposals

KtonDAO should simplify and close any related active or pending proposals that depend on continued RingDAO-funded incentives or continued RING Deposit-based KTON issuance.

Future KTON utility, staking, treasury funding, or tokenomics proposals should be discussed separately under KtonDAO governance.

5. Coordinate With RingDAO

KtonDAO should coordinate the transition timeline with RingDAO where needed, especially around frontend changes, user communication, reward claiming, and the final shutdown of legacy functions.

However, decisions related to KTON issuance, RING Deposit for KTON, and KtonDAO protocol parameters should remain under KtonDAO governance.

User Protection

Existing users should continue to be able to:

• Withdraw matured RING Deposits.
• Unstake existing KTON positions.
• Claim already accrued rewards.
• Complete their exit during the transition period.

No existing user position should be forcibly canceled before maturity.

Expected Impact

For KtonDAO:

• Reduced dependency on RingDAO Treasury incentives.
• Lower protocol complexity.
• No new KTON issuance from RING Deposit.
• More flexibility to redesign KTON’s future utility.

For RingDAO:

• Better alignment with RingDAO’s proposal to reduce recurring expenses.
• Cleaner separation between RingDAO and KtonDAO financial responsibilities.

For users:

• Existing rights remain protected.
• New Deposit and Staking access will be phased out.
• Users will have time to withdraw, unstake, or claim.

Governance Scope

This Temp Check is submitted from the KtonDAO perspective.

KtonDAO governance should decide whether to stop new RING Deposit for KTON, phase out Kton Staking, and simplify related protocol functions.

RingDAO governance separately decides whether to reduce or stop RingDAO Treasury incentives to KtonStaking.

Conclusion

KtonDAO should respond to RingDAO’s proposal by gradually phasing out the old RING Deposit for KTON mechanism and Kton Staking functions.

This transition should be handled carefully, with existing users protected and enough time provided for withdrawal, unstaking, and reward claiming.

Going forward, KtonDAO should explore KTON’s future utility, treasury model, and tokenomics independently through its own governance.

Reference

https://github.com/orgs/darwinia-network/discussions/1603

[SasoLithops]

Hi @hackfisher!

This Temp Check comes as a surprise, since I see this previously symbiotic relationship between Ring and Kton have a sudden break up. This in my opinionwould lead to the end of KTON as a valuable token.

Let me share my view:

KtonDAO on the opposite of RingDAO has no developers, active team members and people who work on it. It plays more of a subDAO role to RingDAO borrowing its development power and tech expertize. Losing that would mean instant "death" of token as people would massively sell Kton as no incentive to hold it any more (no more staking rewards) and not near enough funds in Treasury to do anything worth building to bring some kind of revenue. I alone simply do not have enough brain power.
Other thing is no one from development side of RingDAO is here to step up as development lead in KtonDAO. In a way I see it will be same as it was the faith of Evolution Land, where we had many ideas to move forward but no one to build on them. That is main problem I see in this Temp Check.

As for RingDAO I understand it does not need KTON token any more as a reward for locking Ring. It is not a small burden to give 20M Ring token per year to KtonDAO (this is cca 6.800 $ at current 0,00034 Ring price). And also RingDAO does probably no longer need Kton to be relevant in Kton/Ring "natural ratio" but can now with break up Ring price can move independently.

Having said all this, I personaly will no longer put my time and effort into KtonDAO if this is set in motion as there is a limit to my brain power and no other person from KtonDAO will most probably as pointed above step forward and develop what we as a DAO decide on, although not sure what with so little funds in Treasury can we do at all.

I appologize to everyone in KtonDAO as me not being able to come up with anything worth building in past years. I could not step up or propose to build members of DAO council as my knowledge is too small in development and DAO is supposed to be a group of many people, not one or two....

[2xJDubs]

While this temp check is sad to see from a historical standpoint of the relationship between KTON and RING, I fully understand why it has been started. When Darwinia chain emissions ended I was worried about long term pressure from staking slowly depleting the treasury especially with both RING staking and KTON staking needing support. I understand that this was coming and at this point is probably needed to reduce sell pressure on RING.

I think ending the ability to lock RING to mint new KTON makes a lot of sense and maybe should have been something done a while ago. Is the idea of this proposal to keep the funding as is for the 1 year from the point it is no longer possible to lock RING for new KTON? I think the runway needs to be that long so that if someone locks at the last moment they will receive rewards through the whole locking period.

[A-hogic]

When I first came across the Darwinia Network and the RING token 4-5 years ago, one of the main talking points was the ability to lock RING for several years and receive something rarer and truly valuable in return (KTON was somewhat of a holy grail back then, with a price of around $400 - there were quite a few Youtube tutorials at the time on how to stake and lock ring to earn kton as a reward... many people were talking about it) On top of that, there is staking, which is even more interesting for long term kton holders and remains in fact the only reason for some to keep holding. Since this remains one of the few core functions of kton, I agree with Saso that this would likely mean the end of this project.

As I do not understand enough of the technical side and the financials of RingDAO, I cannot assess how worthwhile it is to continue and what the return effect would be, both financially and in other aspects. What I can observe, however, is a lack of desire and will for KTON to succeed. Even RING, which is the main token, is sadly forgotten - its price has collapsed completely, nobody outside of a few team members talks about the project (aside from a few individuals who receive 1,000 RING for participating in a rcg quiz on Discord) - and the interest in KTON is even lower by several degrees.

@SasoLithops Unrelated to this topic and its final outcome, I am curious whether you know any person / developer with the right skills and motivation who would be willing to get involved, and what kind of costs we would be talking about? I myself am prepared to fund part of the resources out of my own pocket for further development (... there have been quite a few ideas from your side, but they still need to be executed). Perhaps others would then jump on board once development actually started moving forward...

[danairey]

This makes absolutely no sense. Only Reason I still own ring and kton is cause of the staking mechanism , hoping that some product gains traction. Without ring , kton is essentially worthless and you simply killing the token! If this plays out, Im selling all my ring and kton, for the little I will get. The staking mechanism is great as it is.