Initial commit: TFGrid Economics documentation site
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- Based on working minting_plan repository
- Configured for threefold.info/economics deployment
- Added ops documentation for server deployment
- Updated baseUrl and URL configuration
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2025-10-10 21:38:17 -04:00
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# Token System
Our ecosystem uses a multi-currency system to ensure both stability for utility and opportunities for growth and investment.
## Token Types
### TFT (ThreeFold Token)
- **Type**: Tradable reserve asset
- **Availability**: Traded on public blockchains
- **Characteristics**: Price can be volatile, currently trading at artificially low prices
- **Role**: Market-facing asset and entry gateway into the ecosystem
- **Supply**: Scarce, capped at 1 billion maximum
### CC (Cloud Credit)
- **Type**: Stable utility token
- **Peg**: 1/1000 of a gram of gold (0.001g)
- **Availability**: Only circulates within the digital marketplace (non-tradable)
- **Purpose**: Primary medium of exchange for services within the ecosystem
- **Acquisition**: Users can acquire CC at a fixed rate of **1 CC for 2 TFT**, until the market price of TFT surpasses this rate
- **Generation**: Minted when users enter with TFT or credit card, burned when exiting
### TFTF (TFT Future)
- **Type**: Internal accounting token
- **Link**: Tied to the market price of TFT
- **Purpose**: Used for internal accounting and liquidity management
- **Function**: Represents a future claim on TFT
This system is supported by three distinct liquidity pools that manage the flow of value between these currencies and external markets.
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## Liquidity Pools
There are three liquidity pools to manage the ecosystem's economy:
### 1. TFT to CC Swap (One-Way)
- **Function**: Allows users to swap TFT for CC at a fixed rate, which either mints new CC or burns existing CC
- **Direction**: This is a one-way path; CC cannot be converted back to TFT through this mechanism for now
- **Purpose**: Provides a simple and predictable on-ramp for users to acquire Cloud Credits for service payments
- **Note**: This is not a liquidity pool but a direct mint/burn swap
**How it works:**
1. Users enter with TFT or credit card
2. TFT gets **locked** (not converted)
3. Equivalent CC is **minted** based on the lock
4. Users receive CC in their wallet
### 2. TFTF to CC Pool (Two-Way)
- **Function**: Enables conversion between TFTF and CC based on the internal currency rate
- **Source of Funds**: Only CC generated from revenue can be converted into TFTF
- **Purpose**: Facilitates internal settlements and allows revenue to be converted into an asset (TFTF) that reflects the market value of TFT
- **Flexibility**: Allows users to maintain TFT exposure while holding stable CC
### 3. TFTF-USDC Pool (Controlled Two-Way)
- **Function**: Provides a controlled bridge between the internal ecosystem (TFTF) and an external stablecoin (USDC)
- **Purpose**: Enables fiat exit for operational needs while protecting against system drainage
**Rules:**
- **Dutch Auction Principles**: The pool operates based on [Dutch auction mechanics](./dutch-auction-exit.md)
- **Liquidity Cap**: No more than 5% of the USDC liquidity in the pool can be used in a single transaction or period to prevent dramatic price shifts
- **Minimum Margin**: A minimum discount of 20% is maintained, ensuring a margin for the pool
- **Position-Based Pool**: The pool's mechanics are based on its current position and liquidity. More info at [Position Based LP](./position-based-lp.md)
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## Minting and Burning of CC
The creation (minting) and destruction (burning) of Cloud Credits (CC) is a straightforward process tied to market activity.
### Minting
CC is minted when a user **buys** it, either with TFT or by converting TFTF. This ensures that every CC in circulation is backed by an equivalent value.
### Burning
CC is burned when it is **sold** or used to pay for services that are then settled in TFTF.
### Key Principle: Mint and Destroy Cycle
When users exit from CC:
1. Users request to exit from CC
2. CC is **destroyed/burned**
3. Locked TFT is **released** back to the user
4. Exit is subject to liquidity pool rules and Dutch auction mechanics
This simple in-out mechanism guarantees that the supply of CC directly reflects the real-time demand and economic activity within the ecosystem. **The system doesn't create unbacked credits**; it only issues them when value is deposited.
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## Why This System?
This multi-token architecture solves several critical problems:
- **Price Stability**: CC provides predictable pricing for services (pegged to gold)
- **Market Opportunity**: TFT remains tradable with upside potential
- **Controlled Liquidity**: Prevents sudden token dumps while maintaining fairness
- **Sustainable Growth**: Minting/burning mechanisms ensure backing and prevent inflation
- **Operational Viability**: Farmers receive stable CC for planning while retaining TFT exposure options
:::tip Next Steps
Learn more about how this system prevents impermanent loss and rewards long-term participation in [Position-Based Liquidity Pools](./position-based-lp.md).
:::