16. Token Economics
The protocol token is an ownership token. The most important parts of the protocol—intellectual property, treasury funds, and the ability to mint new tokens—are controlled by token holders through futarchy-based governance, not by any single team, foundation, or entity. This is real, unruggable ownership of revenue-generating infrastructure.
On the ownership side, decisions that affect token supply must pass through a decision-market governance mechanism, where participants stake real capital on whether a proposal increases or decreases token value. Proposals the market predicts will harm value are automatically rejected. This replaces subjective voting with market-driven accountability.
On the governance side, holders vote on fee structures, transaction limits, risk weights, oracle configurations, treasury allocation, and protocol upgrades. Revenue direction, parameter changes, and IP stewardship belong to the token holder base rather than a centralized team.
On the economic side, merchants and verifiers stake tokens as bonds, aligning their incentives with honest behavior. Fee routing provides rebates and discounts to active participants. The token enables participation in dispute insurance pools and community delegation for revenue sharing.
A portion of protocol fees flows into a treasury governed on-chain. These funds support security audits, bug bounties, ecosystem grants, and liquidity. If protocol resources were ever misappropriated, token governance provides the mechanism for holders to redirect control.