Understanding its role in the Axo ecosystem
Axo seeks to be the most efficient, sound, and ubiquitous financial protocol on the planet. Hence, it is important that the tokenomics design reflects these values and goals.
Tokenomics
Policy: 420000029ad9527271b1b1e3c27ee065c18df70a4a4cfc3093a41a44
Max supply: 42mn
Circulating supply at launch:
We expect a circulating supply of around 1.2 million tokens at launch, with a maximum potential of 1.785 million if everyone fully vests. Additionally, 1.89 million tokens allocated for platform rewards will unlock at launch. These rewards will not be immediately available; they represent the maximum distributable amount and will be gradually released based on user activity and incentives. Expect zero tokens from rewards to be available on launch day with a gradual distribution going forward.
Maximum emissions:
End of 1st year: up to 13.65mn AXO tokens are expected to be in circulation.
End of 2nd year: up to 23.10mn AXO tokens are expected to be in circulation.
End of 3rd year: up to 32.55mn AXO tokens are expected to be in circulation.
End of 4th year: up to 42mn AXO tokens will be in circulation.
Continuous token buyback:
All fees generated on Axo are used to purchase AXO tokens, which are placed under an Axo DAO.
The full breakdown of token distribution allocations can be found in the graphs below.
Utility
Each transaction on Axo can generate about 10bps (0.1%) of the trade in fees. All protocol fees are used to buy back AXO, creating a negative feedback loop between protocol usage and circulating supply. The more trades occur, the more AXO is bought back.
Axo DAO — all fees, after being converted to AXO, go to its treasury. AXO holders will be able to vote on how to use these funds — remain locked, distribute them to AXO holders, turn them into protocol-owned trading strategies in order to generate ongoing profit or increase liquidity, etc. The possibilities are endless.
AXO can be used to pay for backtesting, using oracles in programmable swaps, trade signal usage, and the like.
AXO holders will have access to special features and tools.
Treasury funds
The Axo treasury has 25% of tokens earmarked for its operations. Treasury funds vest linearly over a span of 4 years after launch. The treasury’s goal is to facilitate actions that improve the health of the protocol and lead to its further development. The planned usage of treasury funds for launch are:
Protocol owned liquidity — a trading strategy with a goal to acquire different native tokens and provide them as market making strategies, increasing liquidity in the market and leading to the treasury owning other native tokens.
Stability strategy — to accumulate a small balance of other liquid tokens, such as ADA and stablecoins, to be used to absorb any AXO sales. The aim of the strategy would be to acquire the liquid tokens at upward AXO token market movements and absorb down movements.
In the future, more actions are planned to boost protocol value and help to fund the development of future key milestones.
Voting rights
The original 25% allocation of AXO tokens in the treasury, as well as any undistributed rewards, are ineligible for consideration in any governance matters until they’re in the hands of the protocol users.