Token Economics

Token Not Issued — Phase 2 Design

No PAIMON ERC-20 token has been issued on BSC mainnet as of this writing. esPAIMON, vePAIMON, EmissionManager, RewardDistributor and the merkle-root distribution flow described below are all design specifications, not deployed contracts.

The only "PAIMON-named" contracts currently on mainnet are:

• PaimonTreasury — fund vault for Launchpad fees & redemption payouts
• PaimonBadge — Soulbound NFT for Launchpad participation achievements

These are infrastructure pieces, not the governance token. The allocation table, emission curve, vesting tiers and Boost mechanism below describe the target tokenomics that will activate when (and if) the PAIMON token launches.

Table of Contents

• 1. Token System Overview
• 2. Emission and Budget Allocation
• 3. Reward Distribution and Vesting
• 4. Governance and Incentives
• 5. Distribution Security
• 6. Treasury and Capital Circulation
• 7. Metrics and Risk Control

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1. Token System Overview

Brief Description: The governance model is centered on PAIMON locked into vePAIMON. Participation incentives (e.g., jPP staking) may distribute esPAIMON, which can vest into PAIMON and optionally be locked into vePAIMON to join governance.

Token Stack

Token/Certificate	Type	Total Supply/Cap	Core Function	Issuing Entity
PP	ERC-20 (ERC-4626 Vault Shares)	Varies with Prime Vault size	Prime Vault Shares, NAV Pricing, Redemption Three-Channel Access, DEX Trading Assets	Prime Vault (ERC-4626)
sPP	Tranche Shares	Varies with Tranche Vault size	Fixed-income tier (e.g., 4%), priority repayment, no governance participation (see Tranche Vault)	Tranche Vault
jPP	Tranche Share	Varies with Tranche Vault size	Exposure to downside risk for leveraged returns; can be staked to earn esPAIMON (see Tranche Vault)	Tranche Vault
PAIMON	ERC-20	10,000,000,000 (Hard Cap)	Governance, staking, liquidity incentives, external incentive assets, protocol value capture vehicle	EmissionManager + Treasury
esPAIMON	ERC-20 Vesting	Subject to emission budget/quota constraints	jPP Staking Mining Rewards; Can be vested to unlock as PAIMON; Also usable for Boost	Reward Distributor / Treasury
vePAIMON	ve (Voting Escrow)	No cap	Gauge Voting, Emission Allocation, Protocol Fee Sharing (per governance charter)	Voting Escrow (vePAIMON)

Token Allocation

Party	Percentage	Liquidity / Vesting Term
Strategic Round	10%	6M cliff + 18M linear
Private Round	10%	6M cliff + 18M linear
Team	15%	12M cliff + 36M linear
Advisors	5%	6M cliff + 24M linear
Ecosystem	5%	0–3% at TGE + 12–24M milestone-based release
Community	30%	Long-term emission; primarily via esPAIMON / delayed release
Liquidity & Market Making	5%	Available at TGE (multisig custody)
Foundation / DAO Reserve	10%	Multisig custody
Marketing & Partnerships	5%	0–3% at TGE + 9–12M linear
Voting / Gauge Incentives	5%	36M linear

Supply Conservation Rule

• Emission Ledger: EmissionManager maintains the "Community Emission Reserve." Each time RewardDistributor mints esPaimon, the reserve is simultaneously deducted; if the reserve reaches zero, minting fails immediately.
• One-for-One Mechanism: When users claim, an equivalent amount of esPaimon is first burned, then an equal amount of PAIMON is released from the Emission/Treasury inventory. This ensures the actual circulating supply remains ≤ 10B.
• Boost Restriction: Only "vested and converted to PAIMON/locked into veNFT shares" contribute multipliers; es still in vesting are excluded from any Boost calculations.
• Governance Position Settlement: Governance positions are created only by locking PAIMON into vePAIMON. esPAIMON must vest into PAIMON first. Supply accounting remains one-for-one and prevents double counting.

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2. Emission and Budget Allocation

Three-Phase Emission Curve

Phase	Cycle	Weekly Base Emission	Decline	Stage Total
Phase A: Launch	Week 1-12	37.5M	0%	450M
Phase B: Growth	Week 13-248	First Week 55.584M	1.5%/week exponential decay to 4.327M	≈ 8.55B
Phase C: Tail Phase	Week 249-352	4.327M	0%	450M

Phase B decay is solidified on-chain with 236 lookup tables, EmissionManager.getBaseBudget(week) O(1).

Demand-Linked Adjustment

Metric Recommendations:

• Prime TVL Increment (Week-over-Week)
• DEX Depth/Volume (TWAP volume, depth, and slippage for PP/USDC pools)
• Premium/Discount Deviation D_t = |P_mkt/NAV - 1| (for risk control reduction, not boosting)

Adjustment Strategy:

• Growth/Cold Start Phase: Benchmark Emission × 1.00
• Insufficient Liquidity (High Slippage/Low Depth): Allocate more budget toward DEX/LP incentives
• Deviation persistently nears protection band: Reduce incentive release speed

Three-Channel Budget Allocation

Channel	Default Allocation	Sink	Description
Prime Growth Incentive	40%	Prime/Tranche Related Gauge	Skewed toward risk-taking activities (e.g., jPP staking)
DEX/LP Incentives	40%	Gauge for PP/USDC Pools	Guide secondary liquidity depth and price discovery
Ecosystem / Gauge Incentives	20%	Treasury / Incentive Budget	Launchpad partnerships, external incentives

Unused budget is returned to the Treasury via reclaimUnused(week) after the cooling-off period.

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3. Reward Distribution and Vesting

Multi-Tier Vesting (User Selected)

Tier	Vesting Period	Reward Coefficient	Early Exit Penalty
Fast	90 days	0.6×	50% unvested portion forfeited
Standard	365 days	1.0×	50% unvested portion forfeited
Loyal	540 days	1.2×	60% unvested portion forfeited

Example Calculation (baseReward = 100)

Tier	Community Emission Quota	User's Actual Total Claim	Remarks
Fast	100 × 0.6 = 60	60	Short-term release, discount factor
Standard	100 × 1.0 = 100	100	Benchmark Tier
Loyal	100 × 1.2 = 120	120	Long-term incentive, multiplier

Boost Mechanism

Boost Inputs

• Base: baseline multiplier granted to all eligible positions
• Activity / Stake Boost: derived from qualifying activity (LP, jPP staking, etc.)
• Governance / ve Boost: derived from vePAIMON voting power

Eligibility Rules

• User holds an active qualifying position
• User's vePAIMON voting power is non-zero
• User complies with transfer cool-down / anti-flipping rules

Key Points

• esPAIMON does not carry governance rights - it cannot vote
• Governance participation requires PAIMON locked into vePAIMON
• Boost multiplier has a soft cap (e.g., 1.5×)

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4. Governance and Incentives

vePAIMON Rules

• Lock-up periods: 1 week to 4 years
• Voting power decays linearly toward unlock
• NFTs are transferable with 48-hour cooling-off for voting/claiming

Gauge KPI Constraints

Condition	Action
Score < 60 for 1 week	maxWeight reduced by 30%
Score < 60 for 2 weeks	maxWeight further reduced to 40%
Score ≥ 70 for 2 weeks	Weight recovery

Nitro External Incentives

• External projects propose() and require VE voting approval
• Incentive assets locked for 4 weeks
• Distributed to eligible voters/LPs from preceding two weeks
• Early termination requires governance approval

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5. Distribution Security

Security Measures

1. Multi-signature: submitRoot(newRoot, signatures) requires 3/5 EIP-712 signatures
2. Cooling-off period: Root enters pending status for 6 hours
3. Rollback Window: Old root claimable for 24 hours, then frozen
4. Distribution Service: Generates merkle.json, root.json, and summary.txt

Flow

NewRoot → Pending (6h) → Cancel OR Activate
                              ↓
                        Old root claimable 24h
                              ↓
                        Old root frozen

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6. Treasury and Capital Circulation

Income Recirculation Formula

Monthly reportIncome(income):

• 40% → Governance Value Capture (Repurchase PAIMON + lock as vePAIMON)
• 40% → Ecosystem Incentives (external incentive matching)
• 20% → Operational Reserve (audits, operations, compliance)

Adaptive Liquidity Weighting

Condition	Action
Insufficient DEX depth	Increase DEX/LP incentive weight
Deviation nearing protection band	Reduce short-term release, shift to vesting
Normal	Revert to default weights

Data Transparency

Weekly automated report publishing:

• Circulating supply (including unvested amounts)
• PP/NAV/Deviation and DEX Depth/Volume
• Emission Utilization Rate
• Gauge weightings and KPIs
• Treasury asset table

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7. Metrics and Risk Control

Operational Metrics

Metric	Target/Threshold	Trigger Action
Prime/DEX Health	70%–90%	Below 60% → Review incentives; Above 95% → Adjust weighting
Unused Budget Return Rate	< 10%/quarter	Review claim processes
Loyal Tier Proportion	20%–35%	< 15% → Discuss adjustment
Gauge Performance Score	≥ 70	Automatic weight restriction for consecutive low scores

Risks and Mitigation

Risk	Explanation	Mitigation
Oracle Data Manipulation	Keeper Malicious or Data Delay	Multi-source validation, threshold limiting, emergency pause
Spread Arbitrage	Rapid Tier Switching	Weekly Limits, Behavior Monitoring
Guard process failure	KPI Not Updated	Backup daemon + manual override + alerts
Multi-signature congestion	Delayed Root Activation	Schedule adjustments
Treasury repurchase impacts	AMM Liquidity Shortage	TWAP/Batch Execution, Slippage Cap