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

# Tokenomics

The $CHIBI token is the **backbone of the Chiblets ecosystem**, powering gameplay, marketplace activity, auctions, and progression. It is designed with a **player-first approach**: fair distribution, sustainable sinks, and zero team allocation.

***

### **Token Supply**

* **Total Supply**: Fixed (Hard Cap) — no inflation.
* **Deflationary Model**: Marketplace fees & auction systems permanently burn tokens, ensuring long-term scarcity.

***

### **Distribution Model**

Unlike traditional gaming tokens, **$CHIBI has no direct team allocation**. The project’s team is fully funded by **marketplace fees and in-game purchases**, aligning the developers’ incentives with the community.

| Category                            | Allocation % | Details                                                                                                                            |
| ----------------------------------- | ------------ | ---------------------------------------------------------------------------------------------------------------------------------- |
| **Play-to-Earn Rewards**            | **70%**      | Earned via battles , quests, PvP leagues, tournaments, and daily login rewards.                                                    |
| **Liquidity Pool**                  | **10%**      | Ensures smooth trading, reduces volatility, and maintains healthy liquidity for Chibi Token pairs.                                 |
| **Community Treasury**              | **10%**      | Used for community events, tournaments, rewards, and player-driven initiatives.                                                    |
| **Partnerships & Ecosystem Growth** | **5%**       | Allocated for collaborations, cross-game partnerships, and promotional campaigns.                                                  |
| **Reserve / Emergency Fund**        | **5%**       | To stabilize the economy in extreme scenarios (release requires community vote).                                                   |
| **Team Allocation**                 | **0%**       | The team earns solely from marketplace fees and in-game purchases — ensuring long-term sustainability without token sell pressure. |

### **Revenue Model for Team**

Since the **team has 0% token allocation**, sustainability comes from:

* **Marketplace Fee**→ split into Burn (50%), Community Treasury (30%), Development Fund (20%).
* **In-game Purchases** (cosmetics, VIP passes, premium content).
* This ensures the **team only succeeds if the game thrives**, making it community-aligned and transparent.

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### **Token Utility**

The $CHIBI token has multiple uses inside and outside the game:

| **Utility**                   | **Use Case**                                                                   |
| ----------------------------- | ------------------------------------------------------------------------------ |
| **Upgrades**                  | Used with Rune Stones to increase Chiblet stats.                               |
| **Marketplace**               | Core trading currency for Chiblets, resources, potions, and crafted items.     |
| **Auction House**             | Competitive bidding system for exclusive assets — 100% burned on winning bids. |
| **Daily Quests & Rewards**    | Earned through completing in-game missions.                                    |
| **Cosmetics & Customization** | Purchase skins, animations, and unique cosmetics.                              |

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### **Deflationary Mechanisms**

The economy is structured to **reduce circulating supply** over time, ensuring token scarcity.

| **Mechanism**                 | **Effect**                                                         |
| ----------------------------- | ------------------------------------------------------------------ |
| **Marketplace Fee Burn**      | Permanently removes tokens from supply.                            |
| **Auction House (100% Burn)** | Every auction transaction reduces supply significantly.            |
| **Crafting & Upgrades**       | Token costs in progression act as soft sinks.                      |
| **Seasonal Events**           | Limited-time sinks (e.g., seasonal crafting, special tournaments). |

***

### **Economic Flow Example**

1. A player earns $CHIBI from completing quests.
2. They use tokens to craft a Strength Rune.
3. They list the Rune in the Marketplace.
4. Another player buys it, triggering a **fee**, part of which is **burned**.
5. That player later joins an **Auction Event**, bidding tokens that are **100% burned**.
6. Circulating supply decreases → token value strengthens → demand for farming increases.