📈Tokenomics

Core Principles

By utilizing the ToON tokenomics features, we can construct an ecosystem that aims to create products that are both sustainable and fair for everyone involved. Our project and all stakeholders will be able to take advantage of the strong and long-lasting infrastructure that we intend to build using these tokenomics principles.

Following is an outline of the key points supporting our tokenomics.

Continuous Fuel for Project Growth

Through mechanisms for issuing tokens and collecting transaction fees on the L2 network, our project keeps a steady flow of development funds. This approach makes sure that our marketing and development efforts are always backed up.

Natural Supply Increase

Our token supply increases naturally, in response to market forces, without any outside interference. A well-balanced ecosystem is maintained and the resources needed to reach new heights are provided by this natural supply growth.

Fair Incentives for DAO Leadership

Since the project team's compensation depends on the project's success, they have an incentive to promote token growth. The team's steadfast dedication to the project's development over the long term and user happiness is guaranteed by this alignment of interests.

---

ToON Tokenomics

Token Distribution

Token allocation has traditionally involved multiple pools designated for a variety of purposes, ranging from team incentives to fundraising reserves that may be stored in a private sale pool.

This pre-allocation method may pose risks to the team's and investors' trustworthiness, among other factors. To mitigate these risks while maintaining operational efficiency and project progression velocity, ToON advocates for fair token distribution among market participants. We take pride in being the first L2 network to implement such a fair and inclusive distribution model, ensuring that every participant is invested in the network's success.

It is imperative to note that the DAO can modify token distribution rules through a voting process. Additional details regarding DAO and the voting procedure can be found on the Governance page.

Token Emission and Total Supply

a) The traditional approach to token emission typically includes a predetermined cumulative supply, followed by a single token emission influenced by cliff and vesting schedules, with the total supply correlating with time.

$$Supply=f(t)$$

b) We propose an alternative strategy with no theoretical cap on the total supply. In contrast, token emission happens gradually, as the market's dynamics control it. Similarly to interconnected vessels, once the secondary market value of the token is higher than the minting price, it encourages market participants to start minting tokens, which drives up the price for each mint based on the following equation:

For example, when 1,100,000 tokens are issued, the price of the next token to be minted is $1.4. After 200,000 more tokens are issued, the price would be approximately $2.4. After an additional 500,000 tokens are issued, the price would be approximately $7.

Consequently, in terms of ToON Tokens, our total supply function is influenced by the token minting costs and is graphically represented as the following.

Project Lead Reward System

Our tokenomics also incorporates a rewards system designed to incentivize the project leader, known as the Maintainer, in their efforts to develop the ToON project. According to this system, the project leader is entitled to receive tokens in accordance with the following rule. According to this system, the project leader is entitled to receive tokens for their use in accordance with the following rule.

The Maintainer earns 10% of the tokens minted additionally after the token supply in the contract exceeds 2,000,000 tokens.

Illustratively, this formula can be expressed as follows:

$$Reward=0.1∗(supply−2∗10 ^6)$$

According to this rule, when 10 extra tokens above the 2 million supply are minted (and the total supply is 2,000,010), the Maintainer will receive a reward of 1 token. Similarly, if 3,000,000 tokens are minted, the Maintainer reward will be 100,000 tokens.

Please note that a lockup period lasts until the price doubles or for one year, whichever comes first. For example, if the Maintainer receives a reward token valued at $10.0, it will be locked for a year. Alternatively, it will be unlocked if the minting price reaches $10.0 x 2 during the year.

Growth Tokens (Bounty)

In addition, we've set up protocols to make it easier to issue more tokens, which will help with project development and marketing. This process is similar to the principles that govern the rewards system for the project leader.

As embedded in the smart contract, an extra 10% of tokens are minted for marketing once the token supply surpasses 2,464,047 tokens.

$$Reward=0.1∗(supply−2,464,047)$$

A lockup period is implemented until the token's value doubles or until 100 years have passed, whichever comes first. For a comprehensive understanding of the vesting rules, refer to the Project Lead Reward System section.

Building a Level Playing Field

Trust is essential to any successful project, and we place a high value on it. Our team's token allocation follows the same rules and regulations as everyone else in the Web3 market. This commitment to equality ensures that no individual or entity has an unfair advantage, fostering a genuinely level playing field for all.

We believe in complete transparency and predictability regarding our token and its operations. As part of our ongoing initiative, the founding team has acquired approximately 1,000,000 tokens from the smart contract under the same terms as external buyers. The proceeds from minting these tokens will be distributed through our DAO to charitable causes. This step demonstrates our unwavering commitment to equity and ensures appropriate compensation for those who have made significant contributions to our success.