> For the complete documentation index, see [llms.txt](https://paragon-protocol.gitbook.io/paragon-protocol/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://paragon-protocol.gitbook.io/paragon-protocol/tokenomics-xpgn/overview.md).

# Overview

XPGN is the core token of Paragon Protocol, used for governance, incentives, and participation across the system.  It connects liquidity, execution, and governance into a unified on-chain economy.

### Token Details

* **Name:** Paragon
* **Ticker:** **XPGN**
* **Standard:** EVM (BSC at launch; bridged as needed)
* **Total Supply (hard cap):** **550,000,000 XPGN**
* **Type:** Utility, governance, and incentive

> **Testnet note:** Any “emissions”/rewards on testnet are play tokens or **Points**. Mainnet parameters below are **defaults** that governance can ratify or amend.

***

### What $XPGN Does

#### Utility

* **Incentives:** Distributed to liquidity pools via **Utilization Gauges** (veXPGN-directed).
* **Governance:** Lock XPGN → **veXPGN** (NFT) to vote on emissions, surplus routing weights, and parameters.
* **Execution Yield:** veXPGN lockers receive a share of **captured surplus** from **Proof-of-Best-Execution (PoBE)**.
* **Access:** Eligibility for Launch/Creator programs, partner gauges, bribe markets.
* **Stability:** Can be routed to **Treasury Vault / Shield Reserve** via protocol fees + surplus skim.

***

### Where Value Comes From (Protocol Revenues)

**Two independent engines fund the system:**

1. **AMM swap fees (v2 pools):**\
   **0.20% per trade** → **0.15% to LPs** + **0.05% to Protocol Vault**
   * Protocol Vault split (governance-set on mainnet):
     * **Buyback & Liquidity** (POL for XPGN pairs)
     * **Shield Reserve** (Paragon Shield, insurance/coverage)
     * **Ops/Audits** (transparent spend via multisig/DAO)
2. **PoBE Surplus (intents + batching):**\
   When the solver executes a swap **better** than the user’s minOut / quote, the **surplus** is split by default:
   * **60%** → Trader **instant rebate**
   * **30%** → **LP Rebate Vault** (to pools actually used in the route; claimable by LPs)
   * **10%** → **Locker Vault** (pro-rata to **veFlow** lockers)\
     *(Governance can tune, e.g., 55/30/10/5 with 5% to Treasury.)*

Additional trickles (small, but additive):

* **Bribe markets** (fees on bribe claims)
* **P10 index tokens** (mint/redeem fees) once live
* **Listing/creator lanes** (optional order-flow sponsorships)

***

### Emissions & Schedule (default mainnet plan)

> Goal: reward **used** liquidity, not idle TVL.

* **Epoch:** weekly
* **Base Emissions:** **E/week** (starting level set by governance at TGE)
* **Distribution:**
  * **90%** → **Utilization Gauges** (veFlow-directed per-pool emissions)
  * **10%** → **Builder/Dev stream** (ops, audits, grants)
    * Of this 10%: **2% retained by Core** (time-vested), **8% to Treasury Vault** (weekly)
* **Decay:** Governance can enable a gentle **emissions decay** (e.g., 1–2%/epoch) to target long-term equilibrium.

***

### veXPGN (Locking) — Voting & Cashflows

* **Lock asset:** XPGN (or stXPGN via adapter)
* **Lock duration:** 1–104 weeks
* **Voting power:** linear with time\
  `veXPGN = XPGN_locked × (weeks / 104)`
* **Vote on:**
  1. **Gauge weights** (emissions per pool)
  2. **Surplus routing weights** (which routes tie-break when prices match)
* **Earnings:**
  * **Locker Vault** share from PoBE surplus (default **10%** of all captured surplus)
  * **Bribes** (for both gauges and order-flow markets)

***

### Utilization Gauges — Emissions Follow Real Usage

Each pool’s weekly emissions are a blend of **votes** and **use**:

```
effective_weight_i = vote_weight_i × (1 + β × norm(FUS_i))
emission_i = EPOCH_EMISSIONS × (effective_weight_i / Σ effective_weights)
```

* **FUS** (Flow Utilization Score) = composite of routed **volume share**, **price-impact smoothness**, and **liquidity stickiness** (see Governance page).
* **β (utilization boost)** default **0.5** (testnet adjustable).

This makes emissions self-correcting: the pools that **actually route trades** get a boost.

***

### Buybacks, Burns & POL

* **AMM 0.05% fee** streams accumulate in Protocol Vault.
  * Governance sets the **buyback/POL/Shield** split.
  * Buybacks can **burn** XPGN or **pair as POL** (XPGN-BUSD, etc.) for deeper books.
* **Optional Burns:** Governance can schedule periodic burns from Vault or surplus skim.
* **POL Flywheel:** Deeper XPGN liquidity → better pricing → more volume → more vault income.

***

### Initial Distribution (high-level)

* **Liquidity & Incentives (gauges):** ~~xx%~~
* **Treasury (ecosystem, grants):** ~~xx%~~
* **Team & Early Contributors (time-vested):** ~~xx%~~
* **Public/Community (launch event or fair-launch plan):** ~~xx%~~

*(Replace “xx%” with your final figures or link to your Allocation page.)*

***

### Risk Controls & Limits (token side)

* **Emissions decay** and **β caps** voted by governance
* **Oracle bands** for PoBE accounting (prevents fake surplus on stale prices)
* **Wash-trade filters** on FUS (discount sybil loops)
* **Treasury transparency:** time-locked, multisig, routine reports