Understand the NFT Art Machine Gun Pool K21 and its Token Economic Model in Three Minutes
K21 will collect 21 pieces of crypto art, managed through smart contracts, with its tokens representing ownership of the collection and allowing for voting when selling.This article was published on ChainNews, author Leo Young
Recently, Beeple's work was auctioned at Christie's for nearly seventy million dollars, attracting widespread attention to NFTs. In this context, a closed art collection project called "K21" has emerged, receiving investments from institutions including Mechanism Capital, DIVERGENCE, and Nascent.
K21 is a closed art collection, also referred to as a "closed art piece machine gun pool," which will collect twenty-one pieces of art, all created by well-known contemporary digital artists. According to its description, it "aims to allow artists and investors to benefit from art transaction income, reshaping art collection, charity, and art exhibitions and custodianship."
What is the K21 Collection?
According to the official introduction, the confirmed artists in the K21 collection include: Alex Mordvintsev, COOL 3D WORLD, David OReilly, Filip Hodas, Hank Willis Thomas & the Wide Awakes, Jenna Sutela, Liam Gillick, Pak, Paul Chan, Precious Okoyomon, Rachel Rose, Raoul Marks, Rebecca Allen, Rirkrit Tiravanija, Simon Denny, Suzanne Treister, and Terrell Villiers. There are also four artists pending confirmation.
Once the artists complete their works, they will be minted as NFTs and stored in the K21 collection. The collection uses a Gnosis Safe multi-signature wallet. After the collection contract and purchase contract are completed, all artworks will be transferred into the contract.
The K21 collection contract is a closed contract; once the twenty-one pieces are filled, the contract will close. At that time, the permissions of the collection contract will be transferred to the group purchase contract. After the transfer, the permissions cannot be changed. As long as someone deposits an equivalent of 21 million dollars into the group purchase contract, it will trigger a purchase offer.
K21 token holders can veto a purchase offer with a 21% voting rate. If the purchase offer is vetoed, the next trigger price will increase by 7%. If the veto does not reach a 21% voting rate, the transaction of the collection works will be successful, and token holders will receive a proportional share of the sale funds.
The contract is expected to complete auditing and go live within the next ninety days.
In addition to the twenty-one pieces in the collection, K21 will also mint original works by the related artists, referred to as XNFTs. XNFTs are priced more affordably, allowing more people the opportunity to collect digital artworks. Artists receive half of the income from XNFT sales, while the remaining half is distributed proportionally to K21 token holders. XNFT collectors can also use K21's decentralized finance applications to generate additional income.
K21 Token
The K21 ERC-20 token was issued on March 12, 2021, with a total supply of 210,000 tokens. Each token represents partial ownership of the collection.
K21 is not a governance token, but token holders have the right to vote against transactions of artworks in the collection.
For example, if someone bids to purchase a piece through a smart contract, K21 token holders can reject the transaction if the opposing votes reach a total of 21%. If the opposing votes do not reach 21%, the transaction proceeds, and the sale income is distributed to each token holder in proportion to their holdings.
Token Usage
Funds for purchasing artworks in K21 primarily come from private placements to professional individual or institutional investors through tokens.
Currently, institutions investing in K21 tokens include Cluster Capital, Collider Ventures, Compute Ventures, Divergence Ventures, Mechanism Capital, and Nascent, along with some individual investors.
Individuals and institutional investors hold over 61% of the total tokens, with an average acquisition price of approximately $0.124 per token.
Token Distribution
More than half of the K21 tokens are used to purchase artworks and support art and social welfare initiatives.
The community holds over 21% of the token share. Distribution will occur through mining mechanisms, K21/ETH trading pair liquidity pool rewards, and other measures. Liquidity rewards are yet to be determined.
Additionally, seventeen collaborators directly involved in collection-related work will receive 15% of the total K21 tokens as compensation; they have not received any cash remuneration.
A small amount is allocated for marketing and cash reserves.
Token Lockup
Tokens for artists, collaborators, and private placement investors will have a linear unlock over ninety days, with 10% unlocking from the date of issuance.
Individuals and institutional investors participating in the private placement will purchase Uniswap's ETH-K21 trading pair LP tokens, with an initial price of $0.124 per K21 LP token. LP tokens will be locked for twelve months. After the lockup period ends, they will unlock linearly over twelve months. This portion of LP tokens accounts for approximately 12% of the initial circulation.
Token distribution and lockup, source: Art for the Next 100 Years. Kanon Releases Key Details of the K21… | by Kanon
Tokens for artists engaged in charitable work will begin circulating from the date of issuance. Tokens for mining and community incentives will also be fully circulated from the date of issuance.
The Development Team Behind K21: Kanon
The development team behind K21 is called "Kanon," an anonymous group specializing in crypto art collection and exhibitions. K21 is the first decentralized crypto art protocol initiated by Kanon.
The K21 white paper states: "Kanon was established to develop a (decentralized) protocol for the art field over the next hundred years."
According to their official introduction, the Kanon team includes curators, cryptocurrency entrepreneurs, blockchain engineers, full-stack developers, as well as designers, lawyers, and marketers, with a combined experience of over fifty years in contemporary art and digital projects.
Additionally, Kanon has stated that it will collaborate with the art charity project Art into Acres to protect 21 million acres of pristine forest in Peru.
Reference sources
Official website and K21 collection:
https://k21.kanon.artK21 press release:
https://docsend.com/view/ukxh9eqentdfas6iK21 ERC20 contract:
https://etherscan.io/token/0xb9d99c33ea2d86ec5ec6b8a4dd816ebba64404afK21 Genesis LP fund pool (subsequently transferred to Uniswap):
https://balancer.exchange/#/swap/ether/0xB9d99C33eA2d86EC5eC6b8A4dD816EBBA64404AFK21 vault:
https://gnosis-safe.io/app/#/safes/0x32EEA10639B92c71846edCC8D3415Cf6eff0645D/balances
