The **Koinos Foundation** is pleased to announce that the Koinos Fund System (KFS) has been successfully deployed and is now live on the Koinos blockchain. This new system introduces a decentralized and transparent way for the community to fund projects that contribute to the growth and sustainability of the Koinos ecosystem.

![unnamed.jpg](https://files.peakd.com/file/peakd-hive/jga/AK9PHDtX9Xt8szDp6F4uPHJc9jz5aBUw3isEFQsqneS6WAUkUXQM685am7pQrVo.jpg)

### A Long-Awaited Milestone

The deployment of the Koinos Fund System marks the culmination of months of work, testing, and governance discussions. While the process encountered several challenges along the way, the result is a robust, on-chain funding mechanism that empowers the community to directly influence the development of the ecosystem.

The governance proposal that enabled this system has been approved by the chain, and the Koinos Fund Contract is now receiving new tokens automatically from inflation with each block.

As many in the community already know, **Koinos Group will be winding down its operations**, and from now on, the **Koinos Foundation** will take the lead in guiding the **development and growth of the Koinos blockchain**.

We understand that this transition is not a simple one. However, we remain fully **committed to the long-term success of Koinos** and to supporting the community that continues to believe in its vision.

The launch of the **Koinos Fund System** represents an important step forward — a concrete effort to ensure that the ecosystem remains vibrant, decentralized, and self-sustaining.

We know this is not the final solution, but it’s a **meaningful milestone** on a journey that we will continue to build **step by step, together with the community**.

### How the Koinos Fund Works

The operation of the Koinos Fund System is conceptually similar to the **Decentralized Hive Fund (DHF)**, a model that has proven effective in the Hive chain.

Every Koinos user can participate by **voting for projects** they wish to support or by **submitting their own proposals** for community funding. Voting can be done using either **KOIN** or **VHP** — the two native tokens of the Koinos blockchain.

Projects that receive the most votes during a given period are eligible to receive funding, provided they fit within the **monthly budget** limits of the fund. This system ensures that community preference and responsible token distribution go hand in hand.

### Funding Through Inflation

The Koinos blockchain originally had a **2% annual inflation rate**, which was entirely allocated to rewarding block producers. With the activation of the Koinos Fund, this structure has been updated to better support decentralized development.

The new inflation model is **4% annually**, distributed as follows:

- 2% for block producers (as before)
- 2% directed to the **Koinos Fund**

This means that, over time, the fund will steadily accumulate tokens that can be used to support valuable community projects, developer tools, ecosystem applications, and outreach initiatives.

### The Monthly Budget Mechanism

Under normal conditions, the Koinos Fund System distributes the **amount of tokens collected during the month** to the projects that receive the most community support. This ensures a steady and predictable flow of resources from the fund into the ecosystem.

However, there are situations where not all of the available budget is spent in a given month. For example:

- There may not be enough approved projects or sufficient votes to allocate the entire budget.
- A donor or external participant might transfer additional tokens directly to the fund contract, increasing the total balance beyond what was collected through inflation alone.

In these cases, the fund will naturally accumulate a larger balance over time. To prevent excessive buildup and to maintain a dynamic funding environment, the system includes a **spending cap rule**:

> Each month, the fund can spend **up to twice the amount of tokens collected during that month**.

This rule allows the fund to use not only the newly collected tokens from the current month but also a **portion of the existing capital** accumulated from previous months.

For instance, if the fund’s balance increases from **500,000 to 700,000 KOIN** in a month, the standard budget would be **200,000 KOIN** — the amount collected through inflation. However, because of the spending cap, the system may distribute **up to 400,000 KOIN** in total, using part of its existing reserves when appropriate.

This flexible budgeting approach ensures that the Koinos Fund remains both **sustainable and responsive** — spending more when opportunities arise, while preserving capital for future community initiatives.

### A Transparent and Community-Driven Process

One of the key advantages of the Koinos Fund System is its fully transparent and on-chain nature. Every action — from proposal creation and voting to fund distribution — is recorded on the blockchain, ensuring complete visibility and trust.

This level of transparency allows the community to hold both developers and fund recipients accountable, while also encouraging open collaboration and innovation across the ecosystem.

### Get Involved

Anyone in the Koinos community can participate in the funding process. Whether you are a developer, content creator, or ecosystem builder, the Koinos Fund provides a new way to bring your ideas to life — powered by the community’s collective support.

You can explore existing proposals, vote for your favorites, or submit a new project directly through the dedicated interface:

### <center>👉 https://kfs.koinscan.io/</center>

### Looking Ahead

The launch of the Koinos Fund System is more than just a new feature — it’s a major step toward **self-sustaining, community-led growth**. By combining decentralized governance with an inflation-funded treasury, Koinos is building the foundation for a truly autonomous blockchain ecosystem.

As more community members begin to participate, propose, and vote, the system will evolve naturally, driven by the shared goal of expanding the reach and utility of the Koinos network.

**The Koinos Foundation** invites everyone to take part in this new phase of decentralized development. Together, we can shape the future of Koinos — one proposal at a time.