$LIQ
Governance & Rewards Token of the LiQ Protocol.
Introduction to $LIQ
$LIQ is the native governance and rewards token of the LiQ Protocol, serving as the backbone of the platform’s staking rewards system, governance mechanism, and long-term incentive structure. Designed to align incentives between stakers, liquidity providers, and governance participants, $LIQ ensures that the LiQ liquid staking ecosystem remains decentralized, efficient, and self-sustaining.
With a fixed total supply of 1 billion $LIQ, the token is strategically allocated to balance staker rewards, protocol incentives, ecosystem growth, and governance utility. This document provides an in-depth breakdown of $LIQ’s tokenomics, distribution, governance functionality, and reward mechanics.
Core Utility of $LIQ
a. Primary Rewards Token for stMNT Stakers
Stakers of MNT through LiQ receive $LIQ emissions as additional rewards, supplementing their DeFi-generated yield.
$LIQ acts as an incentive layer to ensure consistent staking participation and liquidity retention.
Rewards are distributed proportionally to the amount of stMNT held, ensuring fair earnings based on participation.
b. Governance & Decentralized Decision-Making
$LIQ holders govern the LiQ protocol by voting on strategy optimizations, yield allocation, protocol fees, security updates, and treasury management.
Token-weighted voting allows active participants to shape the protocol’s evolution and sustainability.
Proposals can include new DeFi integrations, changes to staking mechanics, and expansion of cross-chain functionality.
c. Protocol Revenue Sharing & Buybacks
A portion of protocol-generated revenue is used for $LIQ buybacks and burns, reducing long-term inflation.
Stakers who hold and stake $LIQ can receive a share of protocol earnings, rewarding long-term participants.
d. Liquidity Incentives & Ecosystem Expansion
$LIQ emissions bootstrap liquidity for stMNT/MNT trading pairs, ensuring deep liquidity for seamless swaps.
Token incentives encourage DeFi integrations, including lending, farming, and collateralization across partner protocols.
Tokenomics & Distribution (1 Billion Total Supply)
To ensure long-term sustainability, equitable distribution, and governance participation, the total supply of 1,000,000,000 $LIQ is allocated as follows:
Token Supply Breakdown
Total Supply: 1,000,000,000 $LIQ
50% (500M $LIQ) – Staking Rewards (stMNT Holders) Half of the total supply is dedicated to staking rewards, ensuring strong incentives for participation while gradually reducing emissions over time.
25% (250M $LIQ) – Development, DAO Treasury & Ecosystem Growth This allocation fuels long-term protocol growth, covering grants, governance incentives, strategic partnerships, and continuous upgrades.
15% (150M $LIQ) – Public Sale & Initial Distribution A portion of the supply is set aside for public sale and launch distribution, ensuring deep liquidity for DEX trading and supporting early adoption.
5% (50M $LIQ) – Team & Advisors Reserved for core contributors and advisors who help build and sustain the protocol, with a structured vesting schedule to align long-term incentives.
5% (50M $LIQ) – Private Investors A limited allocation for early backers with a 2-year vesting period and a 12-month cliff, ensuring long-term commitment.
Key Tokenomics Principles
Sustainable Rewards & Gradual Emission Reduction: Staking incentives start high and taper off over time to balance early participation with long-term sustainability.
Community-Governed Growth: A significant portion (25%) is allocated to the DAO treasury and ecosystem development, giving the community control over key initiatives.
Deep Liquidity & Market Stability: The public sale and ecosystem incentives ensure strong liquidity for trading pairs like stMNT/MNT and support broader DeFi integrations.
Long-Term Alignment: Both team and investor allocations have extended vesting schedules to keep incentives aligned with the protocol’s long-term success.
Staking Rewards Distribution
$LIQ rewards complement DeFi-generated staking yield, ensuring that stakers receive competitive returns while participating in governance.
Emission Model:
50% of total supply (500M $LIQ) is distributed over 5+ years, with decreasing emissions to prevent long-term inflation.
Early adopters benefit from higher initial emissions, which gradually taper off as protocol-generated revenue replaces incentives.
Reward Calculation Formula:
Compounding & Auto-Staking Option:
Users can auto-stake their earned $LIQ for additional rewards.
$LIQ staking allows users to earn a share of protocol fees generated by DeFi strategies.
Governance & Voting Mechanism
a. Proposal & Voting System
Token-Weighted Voting: Governance power is based on $LIQ holdings (staked tokens have greater weight).
Proposal Submission: Any holder with a minimum threshold of $LIQ can submit proposals.
Voting Periods: Governance decisions are subject to timelocked voting, preventing instant protocol modifications.
On-Chain Execution: Successful proposals are automatically executed via governance smart contracts.
b. Treasury & Funding Initiatives
The DAO Treasury (15% of total supply) funds protocol upgrades, new DeFi integrations, and grants.
Holders can vote on funding proposals for R&D, audits, liquidity incentives, and strategic partnerships.
Revenue Sharing & Buyback Model
To sustain long-term demand for $LIQ, the protocol implements buyback and burn mechanisms, reducing supply over time:
Revenue Sources:
Fees from lending, yield farming, and cross-chain deployments.
Trading fees from stMNT/MNT liquidity pools.
Governance-controlled treasury yield strategies.
Buyback Strategy:
A portion of protocol fees is used to buy back $LIQ from the market.
Purchased tokens are either burned (reducing supply) or redistributed to stakers.
This model ensures that protocol growth directly benefits $LIQ holders, aligning incentives between governance participants and stakers.
$LIQ is more than just a reward token, it is the foundation of LiQ’s governance, staking incentives, and long-term sustainability. By aligning staker rewards with governance participation, revenue sharing, and liquidity incentives, $LIQ ensures that MNT stakers and DeFi participants have a stake in the protocol’s future success. Through thoughtful tokenomics, deflationary mechanisms, and decentralized governance, $LIQ is positioned as a high-utility asset within the LiQ ecosystem and the broader Mantle DeFi landscape.
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