# Tokenomics

**Token contract**: [0x9A6A527daeb7439dd00FcAe70d7C6aAD5A9777a3](https://polygonscan.com/token/0x9a6a527daeb7439dd00fcae70d7c6aad5a9777a3)

The PAKT token is an ERC-20 token deployed on the Polygon network.

**Note that Pakt is still in beta phase and we may tweak the inflations settings and pakts tokens limits to improve the economics of the project.**

## Why a new token?

When designing the economics of the project, we had multiple goals:

* Use financial incentives to help people build healthy habits
* Virtuous cycle: the project should become more successful as more people are using the app and reaching their goals
* Sustainability: the project should have steady revenues instead of one big ICO win
* Simplicity: make economics as simple as possible

We decided to create a new token to be able to reward people for their succeeded pakts. The token supply is unlimited and follows a mint & burn model: new tokens are minted for rewards and tokens lost during pakt failures are burned.

The inflation model was also chosen to prevent too much speculation and keep the project accessible to many people. Because there is an infinite supply, people who just buy the token without doing pakts will get diluted over time. It also solves the regulation problem (Howey test) as it’s clear you have to do some work to get earnings and not just buy and dump later.

The price of the token will change depending on:

* the rate of inflation (more tokens in circulation)
* if users feel like the app helps them building good habits (more holding and less selling)&#x20;
* how much people succeed or fail (more mint or burn)

Pakts have a maximum token limit depending on the difficulty so that you cannot win too many tokens too fast, which should prevent a uncontrollable token supply inflation.

## Distribution

The token was created with an initial supply of 5 million tokens:

* 10% (500K) of the tokens were deployed on [Uniswap](https://app.uniswap.org/#/swap?outputCurrency=0x9A6A527daeb7439dd00FcAe70d7C6aAD5A9777a3) at an initial price of 100 PAKT = 1 MATIC.
* 90% are still in the project treasury and will be used to provide more liquidity and fund the project. Pakt is bootstrapped and has no external investors.

## How the project makes money

Pakt makes money in 3 ways:

* Uniswap fees when people trade the PAKT token
* Flat fee when unlocking funds in a successful pakt
* Initial supply of tokens
