info_tfgrid/collections/projectinca/tokenomics/tokens.md

# Tokenomics

```mermaid
flowchart TD
    A[Cloud User] -->|CHF/EUR/...| B(CLOUD MARKET PLACE<br>Discount based on position<br>in TF Liquidity Pool.)
    A[Cloud User] -->|CHF/EUR/...| B2((ThreeFold<br>Liquidity Pool))
    B2 -->|TFT or INCA| B
    B -->|TFT or INCA| C{Proof Of Utilization}
    G[FARMING GRANTS<br>40m Tokens / Month]-->  I{Proof Of Capacity<br>uptime, location, ...} --> D
    C -->|80%| D[ThreeFold Farmers]
    C -->|10%| E[ThreeFold Cooperative]
    C -->|10%| F[Validators<br>Commercial Partners]
  ```

- Farmers are rewarded by 80% of the fees as paid by the Cloud Users, the user pays in Fiat Currency. The marketplace automatically converts the FIAT currency to TFT and INCA as is needed to fullfil the request.
- The Farmers also get rewards from Farming Reward pools to get to expansion faster, 40m Tokens are granted per month to farmers based on their location, uptime or other achievements.
- The [Liquidity Pool](liquidity_pool.md) is a central concept from our tokenomics. Vested tokens can only be unvested through the liquidity pool and the liquidity pool has mechanisms built in the help protect volatility in the price.

## Distribution

```echarts
option = {
  title: {
    text: 'Token',
    subtext: 'Distribution',
    left: 'center'
  },
  tooltip: {
    trigger: 'item'
  },
  series: [
    {
      name: 'Distribution',
      type: 'pie',
      radius: '70%',
      data: [
        { value: 725, name: 'Farmers & Tech ThreeFold Grid 1-3' },
        { value: 1475, name: 'Farmers ThreeFold Grid 4+' },
        { value: 300, name: 'Community Rewards + Promotion' },
        { value: 300, name: 'Grants' },
        { value: 150, name: 'Liquidity / Dex' },
        { value: 450, name: 'Investors' },
        { value: 100, name: 'ThreeFold Dubai Holdings' },
        { value: 500, name: 'Team' },
      ],
      emphasis: {
        itemStyle: {
          shadowBlur: 10,
          shadowOffsetX: 0,
          shadowColor: 'rgba(0, 0, 0, 0.5)'
        }
      }
    }
  ]
};
```

There can never be more than 4 Billion Tokens.

- 55% of supply for Farming and Tech
  - People expanding the network with Router & Node capacity over the multiple releases
  - 18.1%: Farmers & Tech ThreeFold Grid 1-3 (+95% minted, summer 2024)
  - 36.9%: Farmers ThreeFold Grid 4+ (0% minted, summer 2024)
- 7.5% Community Expansion Rewards + Promotion
  - Promotion of the TFGrid, Marketing Activities, ... 
- 7.5% Community grants
  - We want to expand and build our project in first place together with the community
- 3.8% for liquidity providing (DEX, marketmakers, ...)
- 2.5% ThreeFold Dubai holdings (held by the company who manages and promotes the grid)
- 11.3% For Investors
- 12.5% for team and contributor rewards

> Do note this table is still under deliberation and can change


## Release Schedule

![](img/token_release_stacked.png)

- Investors release over 2 years, in equal tranches.
- Farmer rewards are released over 3 years.
- Ecosystem rewards over 4 years

This leads to following maximum unlocking table

![](img/token_release.png)

The vesting accelerates if the token price gets above 0.5 USD, for each 0.1 USD above additional 10% unlocks into the INCA Liquidity pool.
Thanks to the liquidity pool the price remains stable even if people decide to chose the option to unvest faster.

## TFT to INCA

TFT holders can go to INCA based on following rules

- There is 1-1 relationship between TFT and INCA
- TFT can only go to INCA not back.
- There is vesting implemented over 2 years
- X TFT becomes an INCAG with following properties
- X INCA, to be minted over 2 years, equal parts per month
- acelleration unlock rules are: 
  - 10% when INCA token hits 0.5 USD longer than 1 month avg out
  - 10% when INCA token hits 0.6 USD longer than 1 month avg out
  - goes on, 10% per 0.1 USD higher price

More details see [INCA Generator, is like an NFT generating INCA over time](incag.md) token