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Tokenomics Deep Dive

An in-depth look at how Unit Network's economic model creates sustainable value through transparent fee distribution, treasury mechanics, and supply dynamics.

The Unit Network Economic Engine​

Supply Models​

UNITCOIN — Fixed Supply​

  • Total supply: Fixed, never increases
  • No inflation: No new UNITCOIN is ever minted
  • Deflationary pressure: As treasury grows, each token is backed by more value

Wrapped Crypto Tokens — Elastic Supply​

EventSupply Effect
User deposits BTCBTCU minted 1:1
User withdraws BTCBTCU burned 1:1

Supply expands and contracts based on deposits/withdrawals. Always 1:1 backed.

Stable Tokens — Elastic, Over-Collateralized​

USDU and other stable tokens are:

  • Minted when users purchase with reserve assets
  • Burned on redemption
  • Over-collateralized — treasury holds more reserves than tokens outstanding

User-Created Tokens — Fixed at Creation​

  • Supply set once at creation
  • Cannot be changed after tokens leave the bank
  • Treasury builds organically through trading fees

Treasury Mechanics​

How Treasuries Grow​

Every trade on the DEX contributes to two treasuries simultaneously:

Floor Price Formula​

Floor Price = Total Treasury Value / Total Token Supply
Key Insight

The floor price can only go up. Treasuries receive assets from every trade but never release them except through token redemption (burning). This creates a perpetually rising floor.

Redemption Mechanism​

Token holders can always burn their tokens to receive proportional treasury assets:

Redeemed Value = (Tokens Burned / Total Supply) × Treasury Value

This creates a hard price floor — the token can never trade below its treasury-backed value.

The Flywheel Effect​

Each component reinforces the others, creating a self-sustaining growth cycle that accelerates over time.

Comparison: Fee Models​

PlatformTrading FeeFee Goes To
Unit Network2%Treasury (0.5%) + Token (0.5%) + LP (0.5%) + Vault (0.5%)
Uniswap0.3%Liquidity providers only
Coinbase0.5–4.5%Coinbase Inc. (shareholders)
Binance0.1%Binance (centralized)
tip

Unit Network's fee is higher, but it flows back to the ecosystem — not to a company. Every trade makes the network stronger.