BLOCKCHAIN INTERGRATION

Storage space is rented using KRATES, which are awarded

for contribution to the network and powered by our custom blockchain.

**Economic Model**

The KRATE economic model features built-in inflation controls. The block rewards are highly variable and are driven by the inflation control mechanisms which are determined by the Proof of Stake protocol.

**Economic Temperature**

Economic temperature is analyzed using several different metrics to determine the appropriate rate of growth for the total supply of KRATES in order to keep inflation under control.

**Network Reward Rate**

The variable network-wide reward rate will total between 9% to 99%, according to the economic temperature.

Rather than relying on single proof such as pure Proof-of-Work (PoW) or Proof-of-Stake (PoS), the KRATE Project has chosen a tribrid implementation utilizing PoW and PoS, plus Proof-of-Capacity (PoC), giving the network unprecedented security.

The Proof of Work rewards are the average of the last 100 Proof of Stake block reward values.

The Proof of Capacity rewards are the average of the last 100 Proof of Stake block reward values.

The Proof of Distributed Storage reward is KRATES per GB per month stored.

Any KRATE held in the owner's wallet, including the accumulated rewards from PoW, PoC, PoDS, and Masternodes, will earn the daily Proof of Stake rewards of 3% to 33% while held and allowed to stake.

The Masternode return is equal to 5% to 55% of all block rewards generated by PoS+PoW+PoC network-wide, divided by the number of masternodes on the network that day.

Random super blocks will generate a Proof of Stake, Proof of Capacity, or Proof of Work block with a random range of between 2x and 10x its normal reward value.

Proof-of-Capacity and the newly-introduced Proof-of-Distributed Storage create the first opportunity to benefit from two simultaneous reward streams from a single storage space.

**Coin Name:** KRATE

**Ticker:** KRATE

**Total Supply:** No Supply Cap

**Proof Algorithm:** DECA

**Proof Type:** SPS

**Difficulty Retarget Algorithm:** DIFFr

**Difficulty Retarget:** 10 blocks

**Masternode Collateral:** 1 MN Token

**Masternode Reward:** Variable Seesaw

**Block Reward:** Variable

**Block Reward Retarget Algorithm:** DEGT

**Block Time:** 1 minute

**Block Size:** 256KB - 16MB

SPS or Sequenced Proof Structure is a unique twist on hybrid proof systems. KRATE’s unique proof type is designed to allow proofs to be modular, nested and selected in a round robin. SPS is modular because proofs can be added, removed or
replaced using minimal code changes. SPS is nested because all proofs must agree on a block in sequence before that block is considered confirmed. Round-Robin is used in SPS for picking the next proof to create the next block that the other
proofs wait to confirm.

KRATE SPS will be configured to use Proof-of-Stake, Proof-of-Capacity and Proof-of-Work. These three proofs were chosen to compliment each proof's strengths and weaknesses.

The Decentralized Egalitarian Computing Algorithm is a variation of Argon2 specifically Argon2ds + MTP (Merkle Tree Proofs) which is a memory hard egalitarian proof allowing for a wide range of participants with near no advantage for GPU,
FPGA, and ASICs. KRATE is not claiming FPGAs or ASICs cannot be built for the algorithm, only that the advantage will be so small that it will be not worth the financial investment. This is the algorithm that will be used by all proofs
specified in SPS.

Further planned modifications for DECA include Ring signatures and a zero knowledge proof not requiring a trusted seed to start the chain.

Proof-of-Distributed-Storage is not a proof for confirming transactions, rather it is an extension of PoC which allows us to build the Data Storage Platform. PoDS generates storage fee transactions that SPS verifies.

Decentralized Economic Growth Target is an advanced algorithm that utilizes CDD (Coin Days Destroyed), number of transactions per block, value of each transaction, and total number of addresses involved as indicators for the health and growth of the ecosystem. This advanced algorithm will adjust the PoS reward rate to ensure inflation remains within the specified range for a true APR.

In KRATE there is no set block reward and no set reward percentage also known as an APR. PoS reward rates are calculated using DEGT explained above. PoW and PoC will each have their own rewards and those will be an average of the last 100 PoS block rewards.