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sidebar_position: 1
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# Token System
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@@ -8,87 +8,57 @@ Our ecosystem uses a multi-currency system to ensure both stability for utility
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## Token Types
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## TFP (ThreeFold Point) = is same as TFT but only exists in the marketplace
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- **Definition**: TFP is a converted TFT and only exists within the marketplace ecosystem for internal accounting and settlements.
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- 1 TFP = 1 TFT (at time of conversion)
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- TFP cannot be converted back to TFT until the market price of TFT exceeds the fixed conversion rate of CC to TFP (see below in swap section).
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- in other words if on public markets the TFT is prices higher than 1 CC in USD value then you can convert back.
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- Once the market price surpasses the fixed rate, users can return TFP to unlock their original TFT.
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- When a user buys storage, compute, or bandwidth, they pay in CC, but the settlement to farmers is done in TFP.
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- When users convert to TFP, their TFT is locked until they return TFP to unlock their TFT.
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### TFT (ThreeFold Token)
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- **Type**: Tradable reserve asset
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- **Availability**: Traded on public blockchains
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- **Characteristics**: Price can be volatile, currently trading at artificially low prices
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- **Role**: Market-facing asset and entry gateway into the ecosystem
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- **Supply**: Scarce, capped at 1 billion maximum
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- Not directly usable inside the marketplace, must be converted to TFP first
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### CC (Cloud Credit)
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- **Type**: Stable utility token
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- **Peg**: 1/1000 of a gram of gold (0.001g)
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- **Availability**: Only circulates within the digital marketplace (non-tradable)
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- **Purpose**: Primary medium of exchange for services within the ecosystem
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- **Acquisition**: Users can acquire CC at a fixed rate of **1 CC for 2 TFT**, until the market price of TFT surpasses this rate
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- **Generation**: Minted when users enter with TFT or credit card, burned when exiting
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### TFTF (TFT Future)
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- **Type**: Internal accounting token
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- **Link**: Tied to the market price of TFT
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- **Purpose**: Used for internal accounting and liquidity management
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- **Function**: Represents a future claim on TFT
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---
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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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## Swaps
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---
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### TFP to CC Swap (both directions)
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## Liquidity Pools
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- **Function**: Allows users to swap TFP for CC at a fixed rate, which either mints new CC or burns existing CC
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- **Acquisition**: Users can acquire CC at a fixed rate of **1 CC for 2 TFP**, until the market price of TFP surpasses this rate
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- Open Question: maybe it should be 1 CC = 1 TFP? Lets use forum to decide.
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There are three liquidity pools to manage the ecosystem's economy:
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### USD to CC Swap (one way)
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### 1. TFT to CC Swap (One-Way)
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- **Function**: Allows users to purchase CC directly with USD via credit card
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- **Rate**: Fixed rate of 1 CC = $0.128 (as of Oct 8, 2025, changes as the price of gold changes)
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- **Purpose**: Provides an easy entry point for new users unfamiliar with TFT or cryptocurrencies
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- **USD Treasury**: USD collected is held in a treasury to back the CC in circulation
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- **Function**: Allows users to swap TFT for CC at a fixed rate, which either mints new CC or burns existing CC
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- **Direction**: This is a one-way path; CC cannot be converted back to TFT through this mechanism for now
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- **Purpose**: Provides a simple and predictable on-ramp for users to acquire Cloud Credits for service payments
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- **Note**: This is not a liquidity pool but a direct mint/burn swap
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---
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**How it works:**
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1. Users enter with TFT or credit card
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2. TFT gets **locked** (not converted)
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3. Equivalent CC is **minted** based on the lock
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4. Users receive CC in their wallet
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## Link to Revenue
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### 2. TFTF to CC Pool (Two-Way)
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- **Function**: Enables conversion between TFTF and CC based on the internal currency rate
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- **Source of Funds**: Only CC generated from revenue can be converted into TFTF
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- **Purpose**: Facilitates internal settlements and allows revenue to be converted into an asset (TFTF) that reflects the market value of TFT
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- **Flexibility**: Allows users to maintain TFT exposure while holding stable CC
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### 3. TFTF-USDC Pool (Controlled Two-Way)
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- **Function**: Provides a controlled bridge between the internal ecosystem (TFTF) and an external stablecoin (USDC)
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- **Purpose**: Enables fiat exit for operational needs while protecting against system drainage
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**Rules:**
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- **Dutch Auction Principles**: The pool operates based on [Dutch auction mechanics](./dutch-auction-exit.md)
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- **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
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- **Minimum Margin**: A minimum discount of 20% is maintained, ensuring a margin for the pool
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- **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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---
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## Minting and Burning of CC
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The creation (minting) and destruction (burning) of Cloud Credits (CC) is a straightforward process tied to market activity.
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### Minting
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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.
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### Burning
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CC is burned when it is **sold** or used to pay for services that are then settled in TFTF.
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### Key Principle: Mint and Destroy Cycle
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When users exit from CC:
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1. Users request to exit from CC
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2. CC is **destroyed/burned**
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3. Locked TFT is **released** back to the user
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4. Exit is subject to liquidity pool rules and Dutch auction mechanics
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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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- Hosters (farmers) are paid in TFP, which they can convert to TFT or hold for potential appreciation (80% of revenue)
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- 10% of revenue is burned to reduce supply and maintain peg stability, burned TFT.
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- 10% of revenue goes to ThreeFold Foundation for ecosystem development and maintenance
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---
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@@ -101,7 +71,3 @@ This multi-token architecture solves several critical problems:
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- **Controlled Liquidity**: Prevents sudden token dumps while maintaining fairness
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- **Sustainable Growth**: Minting/burning mechanisms ensure backing and prevent inflation
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- **Operational Viability**: Farmers receive stable CC for planning while retaining TFT exposure options
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:::tip Next Steps
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Learn more about how this system prevents impermanent loss and rewards long-term participation in [Position-Based Liquidity Pools](./position-based-lp.md).
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:::
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