--- sidebar_position: 2 --- # 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. --- ## 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) --- ## 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. --- ## 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). :::