# 🧩 Tokenomics Overview

### 💠 LUX — XPL-Aligned with Mint Expansions **and Daily Rebase**

* **Role:** Elastic XPL tracker with two stabilization tools.
* **Mint expansions (epochly):** when **TWAP(LUX/XPL) ≥ 0.99**, protocol **mints LUX** per epoch based on deviation (initial cap \~**1 – 1.5% of supply/epoch**).
* **Daily Rebase (once per day):** automatically adjusts total supply **up to +1%** (expansion) / **−2%** (contraction) **if TWAP is outside 0.98–1.08 XPL**.
* **Allocation of newly minted LUX (when above peg):**
  * **50%** → **Boardroom Rewards** (paid this epoch)
  * **40%** → **FrogsClub Vault** (treasury growth & POL)
  * **10%** → **Dev & Marketing**

### 💎 ARC — Partially-Collateralized USDT0 Stable

* **Peg:** 1.00 USDT0.
* **Mint:** deposit **α USDT0** + burn **(1−α)** worth of **FUSION**.
* **Redeem:** burn **ARC** → receive **α USDT0** + **(1−α) FUSION** (or from a redemption buffer).
* **Collateral leg:** USDT0 is **staked on Aave** to earn on-chain yield, used for **ARC buybacks** each epoch.

### 🎖️ FUSION — Share Token

**FUSION** is the value & coordination token of Fusion Protocol. Holders:

* **Stake in the Boardroom** to receive **ARC every epoch (6h)** and **LUX** during **above-peg (≥ 0.99 XPL)** epochs.
* **Back ARC minting:** each ARC mint burns FUSION for the `(1−α)` leg → structural demand sink.
* **Bootstrap liquidity:** MasterChef emissions reward LPs (Curve LP **ERC-20s**, not NFTs).
* **Govern (phased-in):** starts with multisig + timelock; can move to Snapshot/on-chain later.

**Max supply:** **100,000 FUSION** (hard-capped)

<table><thead><tr><th width="234">Bucket</th><th width="78" align="right">%</th><th width="158" align="right">Tokens (FUSION)</th><th>Vesting / Notes</th></tr></thead><tbody><tr><td>Liquidity Mining</td><td align="right">35%</td><td align="right">35,000</td><td>~36 months, bi-weekly decay; emissions stop when bucket empties</td></tr><tr><td>FrogsVault / Treasury &#x26; POL</td><td align="right">30%</td><td align="right">30,000</td><td>24-month linear; POL seeding, emergency ops, buybacks</td></tr><tr><td>Team (Dev &#x26; Marketing)</td><td align="right">15%</td><td align="right">15,000</td><td>24-month linear; multisig-guarded</td></tr><tr><td>Ecosystem / Partnerships / Grants</td><td align="right">5%</td><td align="right">5,000</td><td>12-month streaming; milestone releases</td></tr><tr><td>Redemption &#x26; Stability Reserve</td><td align="right">10%</td><td align="right">10,000</td><td>Funds ARC redemption leg; replenished via buybacks</td></tr><tr><td>Community / Airdrops</td><td align="right">2.5%</td><td align="right">2,500</td><td>Programmatic; 6-month vest on larger grants</td></tr><tr><td>Initial Liquidity &#x26; MM</td><td align="right">2.5%</td><td align="right">2,500</td><td>Seed liquidity; lock/vest as appropriate</td></tr><tr><td><strong>Total</strong></td><td align="right"><strong>100%</strong></td><td align="right"><strong>100,000</strong></td><td></td></tr></tbody></table>

> **Genesis mint:** only **non-emissions buckets** mint at TGE; the **35% mining bucket** remains unminted and is released via MasterChef on schedule.

#### **Emissions (MasterChef)**

* **Emission bucket:** 35,000 FUSION (maximum)
* **Decay:** **5–10% bi-weekly** (governable). Example: `Eₙ = E₀ × (1–δ)ⁿ`, δ∈\[0.05, 0.10].
* **Initial weights (first 4 weeks):** ARC/USDT0 LP **50%**, FUSION/XPL LP **30%**, LUX/XPL LP **20%** (starts once LUX/XPL pool is live).

#### **Sinks & Buybacks**

* **ARC mint burn:** `(1−α)` worth of FUSION is burned per ARC mint → enduring sink.
* **Buyback & burn/lock:** PSM & fee revenues buy FUSION to **burn** or **lock** (anti-dilution).
* **Redemption Reserve:** ARC redeems pay the FUSION leg **from reserve**, preserving the hard cap.