> For the complete documentation index, see [llms.txt](https://docs.forest.inc/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://docs.forest.inc/launch-tokenomics.md).

# Launch Tokenomics

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Tokenomics in FOREST is built around one principle:\
**every token should be able to express its own economic behaviour.**
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Instead of forcing tokens into a fixed template, FOREST allows creators to configure supply, fees, curves, buybacks, and distribution logic in a modular way. This section explains how each component works and how they interact to form a complete economic system.

## 1. Supply Model

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FOREST does not enforce a fixed maximum supply.
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Tokens use an elastic supply model shaped by user actions:

* Tokens mint when users buy
* Tokens burn or return to the pool when users sell
* Staking, rewards, and airdrops draw from the defined allocation pools

#### Circulating Supply updates in real time based on:

* tokens bought
* tokens sold
* tokens staked
* tokens burned
* tokens claimed from airdrops

{% hint style="info" %}
\[ Creator Configuration ] → \[ Allocation Pools ] → \[ Live Supply Behaviour ]
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This gives creators flexibility while ensuring users can always track supply transparently.

## 2. Allocation Splits

Creators define how the token’s initial distribution is split across four main pools:

| Pool      | Purpose                                                                 |
| --------- | ----------------------------------------------------------------------- |
| Liquidity | Tokens paired with $FOREST to open trading and price discovery          |
| Reserve   | Project-owned supply for future use (team, marketing, ecosystem growth) |
| Staking   | Tokens rewarded to participants staking into the ecosystem              |

These percentages always equal **100%**.

#### Example:

* Liquidity: 40%
* Reserve: 30%
* Staking: 20%

#### How Splits Work in Practice

* Liquidity is locked into the pool at publish.
* Reserve tokens remain in the project’s control.
* Staking rewards release over time based on staking behaviour.

## 3. Fees

Fees create the economic engine that powers each token.

Creators configure:

* Buy Fee: 0–100%
* Sell Fee: 0–100%

Fees can be routed to:

* creator treasury
* protocol
* buybacks
* other configured destinations (depending on template)

#### Example Fee Routing

**Buy Fee (5%)**

* 2% → Creator Treasury
* 2% → Protocol
* 1% → Buybacks

**Sell Fee (7%)**

* 3% → Protocol
* 4% → Buybacks

Fees influence:

* sustainability
* token liquidity
* long-term incentives
* market behaviour

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High buy fees can discourage rapid entry.\
High sell fees can discourage dumping.\
Balanced fees stabilise the ecosystem.
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## 4. Buybacks

Buybacks convert a % of collected fees or app revenue into automatic purchases of the token.

Buyback % can be configured from 0–100%.

#### Buybacks can operate in two modes:

**A. Buy and Hold**

Purchased tokens move into a designated treasury or module.

**B. Buy and Burn**

Purchased tokens are permanently removed from supply.\
Burning reduces circulating supply and increases scarcity.

## 5. Full Token Lifecycle Diagram

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This section outlines the complete lifecycle of a token created through FOREST, from initial configuration to long-term ecosystem mechanics.
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### Lifecycle Overview

The token moves through a series of defined states. Each state activates new mechanics while preserving the logic set by the creator.

{% tabs %}
{% tab title="Conceptual Explanation" %}

* **Creator Config**\
  The creator defines all foundational mechanics.
* **Bonding Curve Launch**\
  Early trading builds liquidity and price discovery.
* **Graduation Threshold Hit**\
  A milestone that triggers progression into full liquidity.
* **AMM Liquidity Mode**\
  Advanced token features activate and market dynamics expand.
* **Long-term Ecosystem Mechanics**\
  The token reaches its mature phase and operates as part of a broader ecosystem.
  {% endtab %}

{% tab title="Lifecycle Flow" %}

#### 1. Creator Config

This is the starting point.\
All parameters, mechanics, curves, fees, and logic are defined here.

  ↓

#### 2. Bonding Curve Launch

The token begins trading on its bonding curve.\
Liquidity expands automatically as trading occurs.

  ↓

#### 3. Graduation Threshold Hit

Once the graduation threshold is reached, the system transitions from bonding curve mode into open liquidity.

  ↓

#### 4. AMM Liquidity Mode

The token now trades in AMM liquidity.\
Active systems begin operating:

* fees
* buybacks
* staking
* airdrops

  ↓

#### 5. Long-term Ecosystem Mechanics

Sustained behaviour, rewards, supply logic, and ongoing token utilities evolve here.
{% endtab %}
{% endtabs %}

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The lifecycle ensures that a FOREST token evolves from a creator-defined concept into a fully autonomous economy with ongoing mechanics.
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