Supply Dynamics
Last updated
Last updated
The $DXP token has been architected with a fixed total supply of 21 million tokens to ensure scarcity and long-term value. This total supply is divided into two key segments: 60% (12.6 million tokens) is allocated as the emission supply, and 40% (8.4 million tokens) is reserved for vesting—distributed over predetermined schedules to team members, advisors, and early investors. Post-deployment, no additional tokens are minted arbitrarily; rather, new tokens are released strictly through a controlled, block-by-block emission mechanism.
The emission process is governed by a halving cycle every four years, ensuring that the rate of token issuance gradually decreases over time. This design creates a deflationary dynamic in which the inflation rate naturally diminishes as the network matures. An excerpt from the emission logic illustrates this mechanism:
In addition to scheduled emissions, the protocol incorporates a recycling mechanism. Tokens used for fees or returned during early withdrawals are burned and then reminted to the unissued supply. This approach not only maintains a balanced supply but also reduces volatility without resorting to permanent token burns.
The emission supply is gradually released into circulation and distributed to liquidity providers, farm owners, yield yodas, and verifiers based on time and performance metrics. For instance, when an LP withdraws early, the $DXP rewards they previously received are returned to the unissued pool—preserving the token’s scarcity and sustainability.
Of the total 21 Million, 60^% of the supply, equating to 12.6^ million $DXP will be minted every block, forming both the circulating and unissued supply. Initially, tokens are minted at a rate of 1 token every block (20 seconds), with the rate halving every four years. The exact timing of halving may vary based on the amount of $DXP recycled during the period.
By default, newly minted $DXP is part of the unissued supply, which is then distributed among Liquidity Providers (LPs), Farm Owners, Yield Yodas, Verifiers, based on the predefined set of terms. The recycling mechanism moves $DXP used for fee payments or returned rewards back into the unissued supply. This controlled release reduces volatility, mitigates uncertainties, and avoids inflationary pressures without relying on token burning.
Token distribution is influenced by time and performance metrics. LPs earn rewards in $DXP, with the option to convert their rewards back into the underlying yield asset they originally supplied to the Farm. To do so, they must return an equivalent amount of $DXP, which is then added back to the unissued supply to reward new LPs entering the protocol. The time-based factor also incentivises early participation.
The vested supply, accounting for 40% of the total, is allocated over predetermined schedules:
Founding Team, Investors, Advisors (25%) – Released over six months to two years to ensure market stability.
Public Sales (4%) – Designed to foster community participation.
Ecosystem Fund (4%) – Vested over 48 months to incentivize developers and contributors.
Airdrops (2%) – Rewarding community builders.
Existing LP Locked (5%) – Acknowledging early liquidity providers.
Together, these mechanisms create a game-theoretical incentive structure that aligns all stakeholder interests. By distributing up to 90% of returns from yield strategies to LPs, and maintaining a deflationary, self-regulating supply model, $DXP reinforces its role as the foundational token driving both participation and long-term value within the Dexponent ecosystem.
