Phoenix Network launches innovative dual Token economic model on Blast L2

Recently, the decentralized derivatives protocol Phoenix Network announced its official launch on Blast L2 and introduced a brand new Token and economic model, injecting new vitality into the decentralized derivatives sector.

Phoenix Network started its IDO on its official website on May 13, and announced on May 29 that the PEX Token IDO has ended, reaching its hard cap within 15 days, raising a total of 625 ETH, with subscription amounts exceeding 2.4 million dollars. Such a hot market response stems from the unique dual-token economic model design of Phoenix Network.

Phoenix Network Overview

Phoenix Network is a decentralized derivatives trading platform deployed on Blast L2, aimed at providing an efficient, secure, and transparent perpetual trading environment to attract more users to participate in the decentralized financial market and provide incentives. The platform's dual Token economic model is a core component.

In the field of decentralized finance, the economic model is crucial for the success of a project. It not only determines the Token distribution and incentive mechanisms but also impacts the long-term development and market performance of the project. An excellent economic model can attract more investors and users, driving rapid project growth.

Governance Token PEX

PEX is the protocol governance Token of the Phoenix Network, with a maximum supply of 10 million coins. PEX is mainly used for platform governance voting and storing various revenues from the protocol derivative exchange.

PEX is an asset-backed cryptocurrency, all PEX is minted by the Phoenix treasury at a rate of 0.0002 ETH per PEX, with a 10% minting tax applied to each minting.

PEX's issuance of minting

The issuance of PEX is closely related to the development history of the Phoenix Network. In the early stages of the project, a genesis minting was conducted through IDO, with a total of 333,333 PEX minted. Among them, 33,333 were allocated as minting tax, and 300,000 were used for IDO distribution and adding initial liquidity. The IDO price was 0.0025 ETH, and the initial listing price was 0.0031 ETH.

The subsequent issuance of PEX can only be minted through bond sales. By selling LP bonds, the treasury holds all the liquidity of the PEX-ETH trading pool.

The minting tax of PEX is used for protocol technology development and maintenance, community node user rewards, and development funds. Over time, the early actual circulation of PEX will slowly increase, but due to various influencing factors, it will enter a deflationary phase in the middle and later stages, and the actual circulation will be far below 10 million coins.

The risk-free value of the treasury assets (measured in ETH quantity) determines the upper limit of the minting volume of PEX.

circulation of PEX

1. PEX holders can earn rewards by staking during the Rebase period: The staking rewards increase compounded in the form of sPEX, and can be unstaked at any time, but the compounded rewards will be released in equal amounts over 180 days according to the blocks. The release speed can be accelerated to a maximum of 30 days by burning WIN.

2. Users can add PEX-ETH LP liquidity to purchase LP bonds and receive PEX minted by the treasury. Purchasing LP bonds to obtain PEX and fully staking it can yield an additional reward of approximately 5% in PEX Token.

PEX's burning and rights

PEX is closely related to the derivatives exchange PbTrade. The treasury acts as the short-term counterparty for all transactions on PbTrade, while PEX serves as the long-term counterparty. Therefore, PEX has a strong value capture capability and will be in a deflationary state in the long run.

In most cases, when traders incur losses, 35% of the profits from the treasury positions are deposited into the treasury as reserve funds for minting PEX, and 55% is used for repurchasing and destroying PEX. In extreme cases, when traders' profits lead to an insufficient ETH collateral ratio of less than 100%, the treasury contract will activate the reserve funds to mint PEX, which will then be sold to fill the gap in the treasury ETH pool.

25% of the trading fees on the derivative exchange PbTrade will be returned to PEX stakers, allowing them to earn not only staking rewards but also a portion of the trading fee revenue.

Contribution Value Token WIN

WIN is the protocol contribution value Token of the Phoenix Network, with a theoretical maximum supply of 1 billion pieces. It is mainly used to reward those who contribute to the growth of protocol users, while also serving as a burning mechanism to accelerate the release of WIN staking rewards.

The genesis phase will issue 1 million WIN for airdrops and rewards during specific phases. Apart from the genesis issuance, all other WIN will be minted by the protocol, which establishes an initial vault of 10,000 USDB for WIN.

WIN Token minting increase

WIN is minted by users who stake PEX, and minting will consume USDB. The minted WIN is rewarded to those who contribute to the growth of the protocol's users, and the minting process will cause the WIN price to rise.

PEX stakers can earn a high compound return of 0.2% every 8 hours, but need to spend an additional 20% of the staked PEX value (USDB) to mint WIN tokens. The minted funds go into the USDB treasury, with 5% of the minted WIN allocated as a protocol development fund and 95% rewarded to referrers and node users.

The usage rate of WIN minting funds is a dynamic variable, initially set at 66%. For every increase of 5 million WIN in total supply, the usage rate decreases by 2%, with a minimum usage rate of 50%.

WIN redemption and burning

WIN holders can accelerate the release speed of PEX staking rewards by burning WIN, a process that will cause the price of WIN to increase.

Users can also redeem WIN from the USDB treasury at real-time prices for USDB, incurring a 15% redemption tax, which will remain in the USDB treasury. The redemption process will also drive up the price of WIN.

The WIN Token model is designed for a one-sided continuous increase, with minting, burning, and redemption all causing the WIN price to rise continuously. This mechanism plays an important role in the launch of the protocol and subsequent user growth.

Dual-Currency Economic Model Summary

The dual-token economic model of the Phoenix Network is a core component of its decentralized derivatives trading platform. The two tokens, PEX and WIN, interact within the platform's economy to jointly promote the development and prosperity of the platform.

1. Injecting funds and liquidity into the protocol: The minting and circulation of PEX and WIN brings more funds and liquidity to the Phoenix treasury and vault.

2. Maintain platform stability and balance: The reward mechanism of WIN and the destruction mechanism that accelerates the release of PEX staking yields promote the positive cycle of the protocol.

3. Enhance transparency and fairness: The minting and circulation of PEX and WIN are fully executed through smart contracts on the blockchain, ensuring fairness and justice.

The dual-token economic model of Phoenix Network achieves economic balance within the protocol through the interaction of PEX and WIN, enhancing platform transparency and fairness, and protecting user interests and rights. This innovative model is expected to bring new development opportunities to the decentralized derivatives trading field.