> For the complete documentation index, see [llms.txt](https://ph-defi.gitbook.io/phame-protocol/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://ph-defi.gitbook.io/phame-protocol/tokenomics.md).

# Tokenomics

## $PHAME token

<mark style="color:purple;">**$PHAME**</mark> is the platform's utility and governance token. The goal of the tokenomics is to incentivise the protocol's supporters and help long term growth of the community.

### Staking

* Staked <mark style="color:purple;">**$PHAME**</mark> will receive 40% of the platform fees from leverage tradings and borrowing fees.
* The fees are currently designed to be paid in the form of native tokens (i.e. the tokens that are actually traded & settled on the platform. On testnet app, they would be $HEX, $tPLS, $USDC and etc). This might change should the community demand so: for example native token fees can be partially converted into <mark style="color:purple;">**$PHAME.**</mark>
* Rules of fee distribution:
  1. If 100% of the tokens are staked, then 100% of the net fees will be distributed to the stakers, in the native currencies.
  2. If x% of the tokens are not staked, then x% of the net fees will be distributed to the treasury address.

### Token Supply

* **Fixed supply** of 55,555,000 tokens
* **Community Allocation** - 73% (at the launch of PHAME protocol, 62% was allocated or minted & 11% was unallocated)
* **Team Allocation** - 24% (no locking or vesting)
* **Other Contributors** - 3% (no locking or vesting)
* Token distribution information can be found on scan.pulsechain.com or phame dashboard.

## $PHLP Token

Users can provide liquidity to PHAME protocol and receive <mark style="color:orange;">**$PHLP**</mark> in return as proof of their LP position.&#x20;

* <mark style="color:orange;">**$PHLP**</mark> effectively represents a basket of tokens used for swaps and tradings on the protocol. The basket includes stablecoins used for leverage short trading and non-stable tokens used for leverage long trading.&#x20;
* &#x20;<mark style="color:orange;">**$PHLP**</mark> can be minted using any underlying token within the basket and redeemed to any underlying token too. <mark style="color:orange;">**$PHLP**</mark> can also be properly transferred & traded, meaning it has true [interoperability](#interoperability) that can be built with other DeFi legos .
* Holding <mark style="color:orange;">**$PHLP**</mark> acts similar to holding the basket of the underlying tokens as a portfolio, while earning fees from protocol but subject to impermanent loss.&#x20;
  * <mark style="color:orange;">**$PHLP**</mark> holders will receive 60% of the protocol fees (leverage trading & borrowing fees)
  * <mark style="color:orange;">**$PHLP**</mark> holders make profit when leverage trader make a loss and vice versa.

## **Interoperability**

* One key new design of $PHLP as apposed to the forked GMX v1 $GLP is that $PHLP liquidity tokens are natively transferrable. Such design allows various more friendly use cases upon $PHLP that could improve capital efficiency, price discovery and ease of building more DeFi legos on PHAME protocols.


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