Tokenomics

overview tokenflow’s tokenomics revolve around the fundshare token — an erc 20 token that represents ownership in a specific on chain index fund (vault) each fundshare is a receipt of deposit , redeemable at any time for eth (based on nav) a governance instrument , granting voting rights within that vault a deflationary asset , benefiting from every trade through the auto buyback and burn mechanism unlike most defi protocols, tokenflow does not have a central or inflationary “platform token ” instead, each fund token is self sovereign , forming its own micro economy that rewards holders and scales with trading activity, with all tokens backed by users deposits the fundshare token definition each index fund (vault) issues one corresponding erc 20 fundshare token for example memecoin index → $flowmeme ai index → $flowai defi blue chip index → $flowdefi these tokens function like “on chain etfs,” representing proportional ownership of the vault’s total value properties name \[fund name] fundshare symbol flow\[index] decimals 18 standard erc 20 (with tax logic for dex transfers) mint/burn authority fundvault (the associated index contract) each fundshare token is a bridge between user capital and the vault’s tvl — a tokenized claim that’s freely tradable, composable, and deflationary by design supply model the fundshare token’s supply is dynamic and elastic , expanding and contracting according to user actions action supply effect description deposit (mint) increases vault mints new fundshares equivalent to deposit value / nav redemption (burn) decreases vault burns fundshares on withdrawal buyback burn (tax) decreases dex trading tax buys fundshares and burns them rebalance neutral internal asset reallocation — no mint/burn governance burn decreases optional burn via treasury or dao vote over time, as trading grows and buybacks increase, supply naturally trends downward — introducing over time, as trading grows and buybacks increase, supply naturally trends downward — introducing scarcity pressure on the fundshare token deflationary design tokenflow’s deflationary mechanism ensures that every transaction strengthens the vault key mechanics 1% transaction tax on uniswap trades 80% of tax proceeds automatically buy fundshares → burn 20% routed to the fund’s treasury outcome continuous supply contraction continuous underlying asset accumulation (due to buy pressure) continuous increase in nav per share value accrual to holders the fundshare token delivers value through three simultaneous channels 1\ nav appreciation as the vault’s underlying assets increase in price, the net asset value per share (navps) rises holders gain intrinsic value, similar to etf investors 2\ deflationary supply as trading volume rises, buyback and burn reduce circulating supply fewer tokens represent the same (or larger) nav → higher price pressure 3\ market activity alignment high trading activity increases both protocol revenues and fund strength — aligning traders and long term holders even volatility becomes productive, as it generates burns and buybacks nav vs market price fundshare tokens exist in two valuation layers metric definition determined by nav (intrinsic value) value of underlying assets / total shares oracle & vault data market price current dex price per fundshare supply/demand in liquidity pools if market price > nav , arbitrageurs deposit eth → mint fundshares → sell on dex if market price < nav , arbitrageurs buy cheap fundshares → redeem for eth this keeps the market price closely tethered to nav, ensuring price stability and efficient trading per fund tokenomics customization each vault can define its own tokenomic configuration , including deposit/withdrawal fees (0–5%) dex trading tax (0 5–3%) burn allocation ratio (default 80/20 split) management fee (optional, ≤1% annualized) governance rules (voting threshold, quorum, time lock) this modular setup allows every index fund to adapt to its ecosystem memecoin funds may prefer higher trading tax (1–2%) for stronger burn loops blue chip funds may use lower fees and tighter arbitrage thresholds dao controlled funds can adjust parameters via governance votes governance utility fundshare tokens double as governance assets holders can create and vote on proposals that affect their vault’s parameters action description add/remove tokens modify the fund’s basket composition adjust weights rebalance allocations per asset set fees change deposit/redeem/trading tax rates within caps use treasury funds allocate eth for liquidity or marketing trigger rebalance force immediate alignment with target weights pause/unpause vault emergency controls voting rights scale with token holdings, and all decisions pass through an on chain time lock before execution this creates a community owned index , evolving organically with its investors liquidity incentives & lp strategy fundshare tokens can be paired with eth on uniswap to form liquidity pools governance may choose to incentivize lps by redirecting part of the 20% treasury allocation as lp rewards offering boosted rewards to lps who lock liquidity for a defined period periodically buying and re seeding liquidity during fund growth this ensures deep liquidity for traders, low slippage for arbitrage, and continuous price discovery for the index treasury utility and flow the treasury portion of trading taxes accumulates eth over time and serves several purposes purpose description liquidity provisioning strengthen uniswap pools and price stability marketing & partnerships support community initiatives and co branding security audits fund external code audits emergency insurance serve as insurance for vault level incidents token buyback (manual) governance directed extra buybacks each treasury is vault specific , meaning $flowmeme holders manage their own treasury, independent of other funds inflation vs deflation dynamics tokenflow introduces a controlled elasticity model new supply (minting) can only occur when new capital enters the fund supply reduction (burning) happens continuously from dex trading activity thus, supply changes are directly tied to real economic activity , not arbitrary emission schedules this ensures no artificial inflation predictable token value behavior continuous alignment between token supply and real backing example — fundshare lifecycle user deposits 10 eth vault buys assets (e g , pepe, spx6900, shiba) 0 3% deposit fee (0 03 eth) goes to treasury 9 97 eth worth of fundshares minted market trades $flowmeme$ on uniswap 1% trading tax → 0 8% for buyback & burn, 0 2% to treasury burn reduces supply; treasury balance grows user redeems shares vault sells assets; applies 0 3% redemption fee returns eth to user, updates supply over time tvl increases supply decreases nav per share rises holders benefit from scarcity and fund performance token economic equilibrium long term equilibrium emerges from the interplay of three forces nav growth (intrinsic value) driven by asset performance and reinvestment of fees supply contraction (scarcity) driven by buyback & burn mechanics linked to trading volume demand expansion (utility) driven by defi integrations, fund reputation, and token utility (governance, composability) this results in a self balancing economy — deflationary when active, stable when quiet, and always tethered to real value summary table — tokenflow tokenomics parameter description default adjustable token type erc 20 with tax logic yes no mint authority fundvault — no burn mechanisms redemption & buyback — no trading tax auto buyback + treasury 1% yes buyback allocation 80% fixed governance (per vault) treasury allocation 20% fixed governance (per vault) governance rights yes (per vault) — yes fee caps deposit/withdraw ≤5% default 0 3% yes supply type elastic, deflationary biased — — launch network ethereum — — the tokenflow difference traditional tokens inflate supply to grow — tokenflow grows by reducing it every economic actor (investor, trader, token community) contributes positively to the system depositors expand tvl traders trigger burns holders benefit from appreciation governance shapes fund evolution this makes each fundshare token a living, breathing asset — adaptive, deflationary, and self sustaining