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Utilities and Sinks

Utilities and sinks are the two halves of the only question that matters for a working token: what can you do with it, and what takes it back out of your hands? A utility is a place the coin is accepted. A sink is a place it is consumed. This page is part of the series under How Cryptocurrencies Gain Value, and unlike most of that series it is mostly a list of specific machinery, with each item marked for what it actually is today.

1. Why the pair has to exist

An emission is a tap. A sink is a drain. A system with a tap and no drain is not an economy, it is a flood — and the token's purchasing power falls no matter how good the project is. The standard cited failure is Axie Infinity's SLP, where rewards poured out faster than anything consumed them.^[1]

The design rule here is written into the contract set as `MintSinkGuard`: every emission is paired with a sink. That is a structural commitment rather than a promise about price, and it is the reason the list below exists at all.

It is also why "we'll burn tokens" is not by itself an answer. As How Cryptocurrencies Gain Value sets out, burns show no reliable relationship to price on their own, and manufacturing scarcity for a token with nothing to do is a named failure mode.^[2][3] A burn is only worth anything when it is a by-product of somebody using the thing.

2. The sinks that are running

Each of these was read from PRANA mainnet on 30 October 2026. Treat figures as of that date.

The burn lottery — a sink by construction

You earn MWALI by supplying liquidity, you burn MWALI to buy tickets, and the prize is paid in KULA. The burned MWALI is destroyed; there is no withdraw function in the contract. Two different tokens on purpose — burning the token you pay out would destroy and re-issue the same supply and net to nothing.

Proven end to end on mainnet rather than described: 10 MWALI burned, one draw completed, 10,000 KULA paid out by the contract to the ticket holder. Ticket price 10 MWALI; veKULA locking boosts how many tickets the same burn buys, up to 3×. Full detail at KULA Lottery.

The gauge — the tap, and the reason to stop moving

The MWALI gauge mints to liquidity providers across five KULA pairs at 0.01 MWALI/second total, split by weight (50/20/20/5/5) then pro-rata by stake inside each pair. Supply is capped in the token at 3,468,960, with a lifetime emission of 3,153,600 decaying 10% a year.

Staking LP to earn is itself a velocity sink — the LP position stops circulating while it earns. See Proof of Liquidity.

veKULA locking

Lock KULA, receive vote-escrowed KULA, and the lock boosts your lottery tickets. The escrow contract currently holds 600 KULA locked — small, and exercised rather than theoretical. Locked coins are out of the float, which is the point: see §5 of Holders, Rarity, and Distribution.

The CDP vault

Lock KULA as collateral and borrow mMELEK, a synthetic. The vault currently holds 400 KULA against 100 mMELEK minted. The design choice worth naming: mMELEK is not the bridge wMELEK — the CDP mints its own synthetic so the bridge invariant (wMELEK supply equals MELEK locked) is never touched by borrowing.

Collateral is a sink in the useful sense: it immobilises the coin without destroying it.

APIS, the engine fee token

On MELEK-Engine, APIS is the fee token — it pays to create a token, and nobody can buy it from us. It is mined by forever-locking wrapped MELEK, which is a permanent sink on the MELEK side in exchange for an ongoing claim on the fee layer.

The PRANA protocol fee

At the chain level, 2% of every block reward goes to a governed treasury and 98% to the mining pot that pays miners. That 2% is consensus-enforced and cannot be dodged by any pool. It is not a burn — it is disclosed revenue, which is the honest category for it.

3. The utilities — places the coin is accepted

Sinks consume; utilities just give a reason to hold. Both create demand, and the distinction is worth keeping straight.

• Posting and curating on MELEK — the coin's stake buys Resource Credits and voting weight. Graphene chains are feeless: you do not pay gas, you spend RC generated by staked power. Stake is therefore a utility, not just a bet.
• Trading on KulaSwap — the AMM where these pairs have a two-sided market at all.
• Creating a token on MELEK-Engine, paid in APIS.
• Mining PRANA — Etchash, with consensus paying every miner by share each 20 blocks, pushed straight to their address.
• Delegating to the KULA Community Fund — lend MELEK Power, and the pooled weight votes on your own posts. The curation vote is live; see the status note in §4.
• The arcade — PLAY, deliberately non-cashable, which is a design decision about what a game token is allowed to be rather than an oversight.

4. What is not running yet

Publishing this list honestly is the point of the page.

• SOULAVA delegation mining — the delegation-mining reward token. The accounting is built and tested; the reward contracts are not deployed to PRANA mainnet, and nobody is earning it by that route. See SoapBox Delegation Mining.
• Token payouts from the KULA fund — designed, not started. The fund account has made no outgoing transfer and holds no engine balance. What a delegation earns today is the curation vote, not tokens.
• BurnMine — described in the KULA Paper as burning proof-of-liquidity into KULA at a fixed ratio, with a curated hub hosting many burn contracts and the hub itself never minting. It is a specification, and should be read as one until it is on-chain with a verifiable address.
• Dividend distributors — deployed for stakers and miners, but real fee yield depends on fee volume that a thin market does not yet produce.

5. How to judge any project's sinks, including this one

A short checklist that works on anybody's tokenomics page:

1. Is the sink load-bearing or decorative? Does using the product consume the token, or is the burn a separate announcement?
2. Is it funded by revenue or by treasury? A treasury-funded buyback can neutralise the very buying pressure it claims to create.^[2]
3. Does the emission exceed the sink? If so the sink is a rounding error and the chart will say so eventually.
4. Can you verify it? An address, a supply, a burn count. Ours: `BurnLotto 0x85E69FA632E1a56f47eAD5B6cc977561B7eb18aD`, `MWALI 0x864E262818C773D3EEC272c2A6A2C8195af1D977`, gauge `0x98d0AF33C78133Ae7791330B7a28034ce85AbB59`.
5. Who can turn it off? On MWALI, `getRoleMemberCount(DEFAULT_ADMIN_ROLE)` returns 0 — no admin exists, so a second minter can never be added.

6. Read next

• How Cryptocurrencies Gain Value — the spine of the series.
• Volume, Liquidity, and Depth · Holders, Rarity, and Distribution · The Crypto Market: Rotation, Day Trading, and Large Buyers
• Inflation and Deflation — Token Emission and Burns — the general mechanics.
• KULA Lottery · MWALI · Proof of Liquidity · KULA Community Fund

Not investment advice

This page lists mechanisms and their status. It is not a claim that any of them will raise a price, not a prediction, and not a suggestion to buy or sell. Every figure is a protocol parameter that governance can change.

Sources

^[1]

^[2]

^[3]

^[4]

^[5]

Coverage

Covers the emission/sink pairing rule and why burns alone do not work, each running sink with its live figures, the utilities that accept the coin, an explicit list of what is specified but not yet deployed (SOULAVA, fund token payouts, BurnMine, dividend yield), and a checklist for judging any project's sinks. Live figures captured 30 October 2026.

References

1. https://23stud.io/blog/how-to-design-token-economics-that-work
2. https://members.delphidigital.io/reports/more-than-just-governance-unpacking-value-accrual-mechanisms
3. https://chainscorelabs.com/blog/history-of-money-and-the-crypto-thesis/monetary-evolution-and-scarcity/why-tokenomics-often-gets-scarcity-wrong
4. Live reads from PRANA mainnet (chain id 712217), 30 October 2026: lottery burn and payout counters, gauge pools and rate, veKULA and CDP vault balances, MWALI role counts
5. KULA Paper, §7 Sinks

Filed under  Chains and how they workTools