How it works
TOKEN emissions
Why the token exists, how you earn it, and when the rate is highest.
A fair launch by construction
The supply of TOKEN started at zero: no pre-mint, no team or investor allocation, no airdrop, no vesting. Every token that will ever exist is minted through the emission curve described below, and the only way to trigger a mint is to close a trade at a loss or be liquidated. The Tokenomics contract is the only minter, and that role was set once and cannot be handed to anyone else. At launch TOKEN cannot be transferred between wallets; it can be staked and unstaked.
Why TOKEN exists
TOKEN is the LP’s fee-claim token: staked, it earns a share of the protocol’s fees and of the LP’s value above $10,000,000. It is how the exchange starts an LP without any capital: the people who pay into the LP, which in this design means the traders who lose, receive a claim on what it earns later.
How you earn it
TOKEN is minted to you when you close at a loss or are liquidated; nothing else mints it, and wins mint nothing. The amount follows your mint basis, the part of the loss the LP kept:
- a losing close while the queue is empty: the loss minus the loss fee (and minus a builder fee, for a close through an approved builder’s frontend);
- a losing close while claims are queued: the whole loss, since no fee is charged;
- a liquidation: the whole margin.
A close of several positions mints once, on the sum, and the result is shared out over the positions. If the Tokenomics contract ever fails during a close, the close still completes; the mint is recorded and replayed later in its original order, so it mints exactly what it would have.
When the rate is highest
At launch the rate depends on where the LP sits:
- While the tracked LP is below $2,000,000, including whenever it is negative, every dollar of mint basis mints a flat 100 TOKEN.
- Above that, the rate falls smoothly as the tail progress grows (the total mint basis priced above the threshold, which never goes down), with a scale of $120,000,000: after that many dollars of losses priced on the tail, the rate is a quarter of the flat rate.
Early traders therefore earn far more TOKEN per dollar lost than later ones. That is deliberate: early activity carries the most risk, since the LP is small and wins are more likely to wait in the queue.
Once the supply exists, the owner can switch minting, once and for good, to a rule where each dollar of mint basis mints a fixed share of the current supply, starting from the rate in force at the switch. From then on the rate no longer decays with the LP, and the part of a loss that refills an LP below zero counts up to 5×, the bonus rising over the first 3 days below zero. Trading while the LP is underwater is what earns the most per dollar.
The mint parameters are not frozen: governance can change them through the timelock, so any change is visible on-chain for 2 days before it applies. Mint curve gives the exact formulas and plots the deployed curve to scale.