> 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 {% hint style="info" %} Tokenomics in FOREST is built around one principle:\ **every token should be able to express its own economic behaviour.** {% endhint %} 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 {% hint style="warning" %} FOREST does not enforce a fixed maximum supply. {% endhint %} 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 ] {% endhint %} 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 {% hint style="danger" %} High buy fees can discourage rapid entry.\ High sell fees can discourage dumping.\ Balanced fees stabilise the ecosystem. {% endhint %} ## 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 {% hint style="info" %} This section outlines the complete lifecycle of a token created through FOREST, from initial configuration to long-term ecosystem mechanics. {% endhint %} ### 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 %} {% hint style="success" %} The lifecycle ensures that a FOREST token evolves from a creator-defined concept into a fully autonomous economy with ongoing mechanics. {% endhint %} --- # Agent Instructions This documentation is published with GitBook. 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