xKZA

xKZA is essentially “locked KZA” or “staked KZA”. It is a different form of KZA. xKZA is forged when KZA is staked on the Kinza Finance platform. It is a non-transferable BEP-20 token used for voting to direct emissions.

xKZA holders earn interest from the pools they have voted for, as well as bribes from borrowers.

In each block, a percentage of interest goes to xKZA holders, distributed proportionally among voters in the current epoch.

Instead of selecting a lock period upfront, KZA can be forged into xKZA at anytime instantly at 1:1 ratio.

When transforming backwards, a redemption period is selected. xKZA is extracted to KZA up to a maximum of 1:1 conversion ratio, according to the user-defined redemption period.

Extraction Process

xKZA can be converted into KZA at any time, but is subject to an extraction period. The minimum extraction duration is 15 days, up to a maximum of 6 months. The ratio of KZA redeemable for xKZA increases from 1:0.5 to 1:1 along that time frame in a linear interpolation. Kinza Finance users can choose their preferred extraction period. If the selected extraction period is lower than the maximum (ratio < 1:1), the unclaimed excess KZA is burned. This extraction process is designed to encourage and reward long-term KZA holders.

While being extracted, the xKZA can still be used in voting, and the user can continue to split interest and bribes, but only at 50% of the xKZA value. Once the extraction process finishes, the user's allocation for voting, interest, and bribes is cancelled.

The user can cancel the extraction process at any time, in which case, the user will retrieve all initial redeeming xKZA, and no KZA.

Example:

Linda wants to extract 1000 xKZA, and has selected a six-month maximum extraction period to convert xKZA to KZA at a 1:1 ratio. During that six-month period, Linda will earn dividends as if she actually allocated 500 xKZA to the bribery option.

On the other hand, if Linda chose a three-month extraction period, she would receive KZA at a 1:0.727 ratio. In this instance, Linda can redeem 727 KZA at the end of the extraction period. The 273 excess KZA is burned. During that three-month period, Linda still earn dividends as if she actually allocated 500 xKZA to the bribery option.

Extraction Period	Conversion Ratio (xKZA:KZA)
15 Days	1:0.5
1 Month	1:0.545
2 Months	1:0.636
3 Months	1:0.727
4 Months	1:0.818
5 Months	1:0.909
6 Months	1:1