The Concentric Finance protocol introduces a dual-token model with $CONE and $xCONE tokens. Both tokens have specific roles in the ecosystem and are emitted under different circumstances.
$CONE is a freely tradable token. When users provide liquidity and stake their LP tokens, they receive $CONE tokens as yield. $CONE tokens also serve as governance tokens, allowing holders to vote on proposals and influence the development of the Concentric ecosystem. The emission rate of $CONE tokens is determined by the Concentric Finance smart contract and can be adjusted through governance proposals. This provides flexibility and allows the community to react to market conditions and align incentives effectively.
$xCONE tokens serve as a means to incentivize long-term commitment to the platform. Unlike $CONE tokens, $xCONE tokens are not immediately tradable. They are subject to a 6-month vesting schedule. When users provide liquidity and stake their LP tokens, they earn $xCONE tokens alongside $CONE tokens. However, they can only convert their $xCONE tokens to $CONE tokens after the vesting period, promoting long-term participation and stability within the Concentric ecosystem.
Furthermore, all trading fees collected by the Concentric Finance protocol from the liquidity provided on Camelot v3 are distributed proportionally to $xCONE stakers. This encourages users to hold onto their $xCONE tokens and continuously participate in liquidity provision, as they receive a share of the generated trading fees.
By implementing these mechanisms, Concentric Finance aims to strike a balance between encouraging active participation and ensuring the long-term sustainability of the ecosystem. The carefully designed liquidity incentives and token emission strategies not only attract liquidity but also encourage community participation and governance, setting the foundation for a thriving and sustainable DeFi platform.
Concentric will have 550 days (1.5 years) of emissions, equalling 440,000 tokens distributed to the Community in both CONE and xCONE: