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

# SWAN Tokenomics

SwanChain Tokenomics and Governance Framework

## SWAN in Swan 2.0

With the [Inference Cloud](/swan-inference/swan-2.0-inference-cloud.md), SWAN's utility is:

| Utility                 | Description                                                                                                                              |
| ----------------------- | ---------------------------------------------------------------------------------------------------------------------------------------- |
| **Pay with SWAN**       | Consumers who deposit SWAN on Swan Chain (254) receive a 10% credit bonus, making it the cheapest way to buy inference                   |
| **Provider collateral** | 35,000 SWAN on Swan Chain is one of the accepted collateral forms for GPU providers (USDC on Ethereum or Base, and card, are the others) |
| **Governance**          | SIPs on pricing policy, incentives and protocol parameters — see the [governance repository](https://github.com/swanchain/governance)    |

Provider income is paid per token served at published payout prices; the UBI allocation described in the Swan 1.0 sections has ended under [SIP-003](https://github.com/swanchain/governance/discussions/21).

## Overview

SwanChain introduces a comprehensive tokenomics structure designed to support its ecosystem's growth, incentivize participation, and ensure operational sustainability. This document outlines the strategic allocation, governance mechanisms, planned token release schedule, and how the token is used in the network today. The provider-income formulas of Swan 1.0 (FCP/ECP/MP) are in [Computing Provider Income](/swan-inference/inference-marketplace/swan-provider-income.md).

### Total Token Supply

* **Total Supply:** 1,000,000,000 Swan Tokens

<figure><img src="https://3478205236-files.gitbook.io/~/files/v0/b/gitbook-x-prod.appspot.com/o/spaces%2FcvUWH8GhRCqvKwuN0BGF%2Fuploads%2FnqfaGilUjVlrCWTfKLa6%2Fimage%20(2).png?alt=media&amp;token=d762f4e1-46b2-486f-a178-c2c09ac1b204" alt=""><figcaption></figcaption></figure>

### Token Allocation and Distribution Breakdown

#### 1. Early Purchasers (20%)

* **Purpose:** To fund the initial development and expansion phases of SwanChain.
* **Details:** Early Purchasers provide essential capital for foundational buildout and scaling operations. This funding supports technical development, operational infrastructure, and initial market strategies.
* **Unlock Schedule:**
  * 1.8% unlocked at TGE (Token Generation Event).
  * Remaining tokens distributed linearly over 4–8 quarters after a 6-month cliff.

#### 2. DAO Treasury (20%)

* **Purpose:** To manage investments, cover legal costs, and other financial necessities.
* **Details:** The DAO Treasury is critical for financial management and operational expenditures. It is funded by contributions from market providers and is used for strategic investments and covering essential expenses such as legal fees.
* **Unlock Schedule:**
  * 2% unlocked at TGE .
  * Remaining tokens distributed linearly over 40 quarters.

#### 3. Ecosystem Fund (25%)

* **Purpose:** To support ecosystem growth through grants, projects, and other initiatives.
* **Details:** This fund is crucial for nurturing innovation within the SwanChain ecosystem, providing financial support to developers, startups, and community projects that contribute to the network’s enhancement.
* **Unlock Schedule:**
  * 4% unlocked at TGE.
  * Remaining tokens distributed linearly over 16 quarters.

#### 4. Core Contributors (15%)

* **Purpose:** To reward and retain the developers and team members who are integral to the development and maintenance of SwanChain.
* **Details:** This allocation ensures that the developers and personnel central to SwanChain’s operations are motivated and retained, facilitating ongoing innovation and network maintenance.
* **Unlock Schedule:**
  * 0% unlocked at TGE.
  * Remaining tokens distributed linearly over 12 quarters after a 6-month cliff.

#### 5. Airdrops (20%)

* **Purpose:** To incentivize broad network participation and engagement.
* **Details:** Airdrops distribute Swan tokens widely across the community to stimulate network activity and growth, enhancing user adoption and community vibrancy. 10% of the total supply has been reserved for computing providers over the years. The annual airdrop rate cannot exceed 10% of the current circulation supply.
* 2% unlocked at TGE.
* Remaining tokens distributed linearly over 32 quarters.

### Token Flow Diagram

<figure><img src="https://3478205236-files.gitbook.io/~/files/v0/b/gitbook-x-prod.appspot.com/o/spaces%2FcvUWH8GhRCqvKwuN0BGF%2Fuploads%2Fu8jPU3teOkEpRdAkgSlD%2Fimage.png?alt=media&amp;token=be102cb4-122a-4baf-b9ed-d5e314295d0e" alt=""><figcaption><p>Token Flow Diagram</p></figcaption></figure>

### Governance and Incentives

#### Governance Participation

* **Collateral Requirement:** Community members must stake tokens to participate in governance decisions.
* **Governance Rewards:** Active participants may receive rewards, such as 1% of the DAO Treasury, to incentivize involvement and wise decision-making.