Economic Mechanisms
Buyback
Net fees collected by Tokenlon will be used to buyback LON on the open market, and the LON bought back will be transferred to the treasury and staking reward pool.
Staking
LON holders will be able to enjoy fee discounts and governance rights by participating in the staking. In return, the stakers will receive LON as staking reward. The staking rewards come from the LON bought back on the open market. The number of LON used for staking rewards from each buyback will be determined by the following formula.
stakingRewardLON = buybackLON * stakingRewardFactor)
LON Staking amount = LON buyback amount * Staking Reward Factor
The default staking reward factor value is 0.6, that is, for every buyback of 1 LON, 0.6 LON will be used for staking reward.
Treasury
Treasury is a LON reserve pool governed by the community, used to develop and promote the development of the Tokenlon ecosystem. The LON in the treasury comes from LON bought back on the open market. The number of LON allocated to the treasury in each buyback will be determined by the following formula.
treasuryLON = buybackLON * (1 - stakingRewardFactor)
LON amount in the Treasury = LON buyback amount * (1 - stakingRewardFactor)
The default value of the initial staking reward factor is 0.6, that is, for every 1 LON bought back, there will be 0.4 LON allocated to the treasury.
Mining
When the number of LON issued is within the maximum cap, each buyback will trigger LON mint. The number of tokens minted will be determined by the following formula, and the minted LON will be used to reward ecosystem participants through the Tokenlon Incentive Plan.
issueLON = buybackLON * mineFactor
LON token amount = LON buyback amount * Mining Factor
Default initial mining factor is 1, that is, every time 1 LON is repurchased, 1 LON will be minted. The minted LON will be used to reward ecosystem participants according to their reward ratio.
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