Fair Conversion & Market Integrity Policy

 

(KAT → KAT POL Migration)

This policy defines the rules governing the conversion of legacy KAT tokens (ETH/BSC) into KAT POL on Polygon. Its purpose is to ensure a fair, transparent, and orderly migration that protects community interests, preserves market stability, and supports the long-term evolution of KAT utility across Kambria DAOs.

The policy is designed to prevent sudden supply shocks, manipulation, and disproportionate influence by large holders during the early stage of KAT POL liquidity formation.

1. Principles

The conversion framework is guided by three core principles:

1.1 Fair Access

All holders - large and small - should have equitable opportunity to convert their legacy KAT into KAT POL without being crowded out by oversized requests.

1.2 Market Integrity

Conversion flow must ensure that KAT POL enters the market gradually, preventing sudden surges of liquidity that could disrupt early price discovery or destabilize DEX liquidity.

1.3 Operational Transparency

Rules must be clear, enforceable, publicly documented, and resistant to manipulation through artificial splitting, batching, or multi-wallet strategies.

2. Monthly Conversion Capacity

To maintain controlled, sustainable issuance of KAT POL, Kambria establishes a global Monthly Conversion Capacity.

Monthly Conversion Capacity Limit

A maximum of 5,000,000 KAT may be converted into KAT POL each calendar month across the entire ecosystem.

This cap is not per-wallet and not per-request.

It represents the total allowed conversion volume, aggregated across all users.

Implications

• Once the monthly 5M threshold is reached, remaining requests automatically roll over into the next month.
• Splitting conversions across multiple wallets or multiple small requests does not increase access.
• This mechanism ensures predictable supply flow and protects early-stage DEX liquidity.

Kambria may adjust this cap after observing early migration behavior.

3. Minimum & Recommended Conversion Amounts 

To ensure that users do not waste funds on transaction fees (especially on ETH/BSC), and to reduce operational overhead for the verification team, Kambria applies the following minimum guidelines:

3.1 Hard Minimum per Conversion Request

• 100,000 KAT per request

Requests smaller than this threshold will not be processed because gas fees and manual verification costs outweigh the value being converted.

3.2 Recommended Minimum for Gas Efficiency

• ≥ 500,000 KAT per request

At this amount, the gas fees typically represent a reasonable fraction of the token value being converted (generally below 10–20%).

Users may accumulate tokens and convert periodically to achieve better gas/value efficiency.

2.3 Rationale

• Gas fees on ETH/BSC can be relatively high, making very small conversions inefficient.
• This protects community members from converting amounts where gas could consume a large percentage of value.
• It reduces unnecessary load on the conversion operations workflow.
• It aligns with the Monthly Capacity Rule and ensures orderly processing.

4. Request Ordering Rules

Conversions are not processed purely by time of submission.

To ensure equitable access and minimize market impact, requests are processed based on ascending order of request size.

Processing Order

1. All requests submitted during the month are grouped.
2. Requests are sorted from smallest to largest conversion amount.
3. For requests of the same size, the system uses chronological order (FIFO).
4. Requests are processed sequentially until the 5M monthly cap is reached.
5. All remaining requests are automatically scheduled for the following month.

Rationale

• Protects small community holders from being displaced by large requests.
• Reduces the ability of whales to monopolize monthly conversion capacity.
• Smooths the release of KAT POL into the market.
• Improves fairness, transparency, and perceived legitimacy of the process.

5. Burn Transaction Requirement

To prevent batch submissions and ensure all requests reflect real user intent, each conversion request must be backed by a unique burn transaction.

Burn Transaction Rule

• Each conversion request must include a distinct on-chain burn TX hash.
• Multiple requests cannot share the same burn transaction.
• Requests with duplicate burn TX hashes may be merged, downgraded, or scheduled for later processing.
• This requirement introduces natural friction, discouraging automated mass submissions from large holders.

Why This Rule Is Needed

• Ensures each request represents a deliberate action.
• Prevents whales from submitting hundreds of small requests using one burn transaction.
• Supports the ascending-size priority model.

6. Verification and Scheduling

6.1 Verification Process

For each request, Kambria verifies:

• Burn TX hash
• Burn amount
• Originating wallet address
• Timestamp and validity of the burn transaction

6.2 Scheduling

• Requests processed within the current month receive KAT POL corresponding to the burned amount.
• Requests exceeding monthly capacity are scheduled for the next available month.
• The scheduling order follows the same small-to-large prioritization.

7. Transparency Commitments

Kambria will maintain transparent communication during the migration process, including:

7.1 Monthly Reports

• Total amount converted
• Total number of processed requests
• Remaining unprocessed requests (if any)
• Next month’s estimated queue

7.2 Public Documentation

All rules, parameters, and updates will be published in the KAT Tokenomics Documentation and announced to the community.

8. Long-Term Evolution

As KAT POL adoption increases - particularly through DAO contribution recognition, privileges, governance, and ecosystem usage - Kambria may progressively adjust:

• Monthly conversion capacity
• Request processing strategy
• Supporting tools and user interfaces
• Liquidity management policies

Any revisions will prioritize fairness, market stability, and alignment with Kambria’s multi-stakeholder token utility framework.

9. Summary Table

Policy Component	Rule
Monthly Capacity	Max 5,000,000 KAT converted ecosystem-wide per month Hard minimum per conversion request: 100,000 KAT per request Recommended minimum for gas efficiency: ≥ 500,000 KAT per request
Ordering Mechanism	Sort requests by ascending size, FIFO within equal sizes
Burn TX Requirement	One unique burn transaction per request
Overflow Mechanism	Rollover to next month after reaching 5M cap
Verification	Manual burn TX verification per request
Transparency	Monthly public updates on conversion progress