> 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/xpgn-tokenomics.md).

# XPGN Tokenomics

XPGN is the core token powering Paragon.  It aligns liquidity, governance, and execution into a single incentive system driven by real protocol activity.

### TL;DR

* max supply: **550,000,000 XPGN**
* emissions distributed via farming
* protocol fees support buybacks and liquidity
* veXPGN controls emissions and incentives

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### Supply Model

#### 🔒 Hard Cap

* maximum supply: **550,000,000 XPGN**
* enforced at the protocol level

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#### Distribution

XPGN supply is allocated across:

* liquidity incentives (farming)
* treasury and protocol liquidity (POL)
* ecosystem and growth
* team and contributors (vested)

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👉 Tokens are released over time, not fully issued at launch.

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### Emissions

XPGN emissions are:

* distributed to farming pools
* directed by veXPGN governance
* adjusted based on participation and usage

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👉 The system is designed to reward active liquidity rather than idle capital.

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### Value Drivers

XPGN value is driven by:

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#### 💸 Trading Activity

* swap fees generated by protocol usage
* partially allocated to treasury
* used for buybacks and liquidity

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#### ⚡ Execution Efficiency

* optimized execution may generate additional value
* distributed across participants

📌 See **Surplus & Rebates** for details

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#### 🌾 Emissions

* incentivize liquidity and participation
* governed and adjustable

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### veXPGN (Governance Layer)

Locking XPGN creates veXPGN, which allows users to:

* vote on emissions
* influence protocol parameters
* participate in incentive systems

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👉 veXPGN aligns long-term users with protocol growth.

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### POL & Buybacks

Protocol fees contribute to:

* buybacks of XPGN
* protocol-owned liquidity (POL)
* long-term market stability

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👉 This creates a feedback loop between usage and token demand.

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### System Model

Paragon combines three layers:

* **Emissions** → drive participation
* **Fees** → capture value
* **Execution** → improve efficiency

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👉 Together, these create a system where activity drives rewards.

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### ⚠️ Key Principles

* emissions are controlled, not unlimited
* governance adjusts parameters over time
* token value is tied to protocol usage
* no single mechanism dominates

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### Summary

XPGN is designed as:

* a governance token
* an incentive mechanism
* a value-aligned asset

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It connects liquidity, execution, and governance into a system where real usage drives long-term value.