Phoenix Network Launches Innovative Dual Token Economic Model on Blast L2

Phoenix Network recently announced its official launch on Blast L2, introducing a brand new Token and economic model, injecting new vitality into the decentralized derivatives field. The project started its IDO on May 13th, reaching its hard cap in just 15 days, raising 625 ETH, with subscription amounts exceeding 2.4 million USD. This enthusiastic market response has sparked curiosity about the unique charm of Phoenix Network. This article will delve into the dual Token economic model of Phoenix Network on Blast L2, including the governance Token $PEX and the contribution value Token $WIN.

Phoenix Network Overview

Phoenix Network is a decentralized derivatives trading platform built 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 corresponding incentives. Its dual Token economic model is a core component of the project.

In the field of decentralized finance, economic models are crucial to the success of projects. They not only determine the Token distribution and incentive mechanisms but also affect the long-term development and market performance of the project. A good economic model can attract more investors and users, driving rapid project growth.

Governance Token PEX

PEX is the governance Token of the Phoenix Network, with a maximum supply of 10 million. Its main functions include governance voting rights on the platform and serving as the primary value storage point for various revenues of the protocol derivatives exchange. PEX is an asset-backed cryptocurrency, and all PEX are minted by the Phoenix treasury at a rate of 1 PEX for every 0.0002 ETH, with a 10% minting tax applied to each minting.

issuance of PEX 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 an IDO, resulting in a total of 333,333 PEX. Subsequent issuance of PEX can only be minted through bond sales. The treasury holds all the liquidity of the PEX-ETH trading pool.

The risk-free value of the treasury assets determines the upper limit of the minting amount of PEX. Over time, the actual circulation of early PEX will slowly increase, but in the middle and later stages, it may enter a deflationary phase, and the actual circulation will be far below 10 million.

circulation of PEX

PEX holders can earn rewards through staking, increasing their returns in the form of sPEX. Users can also add PEX-ETH LP liquidity to purchase LP bonds and obtain PEX minted by the treasury.

PEX's burn and rights

PEX is closely related to the derivatives exchange PbTrade. The treasury acts as the short-term counterparty for all trades on PbTrade, while PEX serves as the long-term counterparty. In most cases, when traders incur losses, 35% of the treasury's position profits are deposited into the treasury as reserve funds for minting PEX, and 55% is used for repurchasing and destroying PEX.

In addition to staking rewards, PEX stakers can also receive 25% of PbTrade transaction fees as additional revenue. This design gives PEX a strong value capture capability, which may be in a deflationary state in the long run.

Contribution Value Token WIN

WIN is the protocol contribution value Token of the Phoenix Network, with a theoretical maximum supply of 10 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.

WIN Token minting and issuance

WIN is minted by users who stake PEX, and minting will consume USDB. PEX stakers need to spend an additional 20% (USDB) of the staked PEX value to mint WIN Token in order to gain a high yield of 0.2% compound interest every 8 hours.

WIN redemption and burning

WIN holders can accelerate the release speed of PEX staking rewards by burning WIN. Users can also redeem WIN for USDB from the USDB treasury at real-time prices, but a 15% redemption tax applies.

The WIN token model is designed for one-sided continuous appreciation: minting WIN, burning WIN, and redeeming WIN for USDB will all lead to a continuous increase in the price of WIN.

Synergistic Effect of Dual-Currency Economic Model

PEX and WIN play different roles in the economic model of the Phoenix Network, interdependent and promoting each other, jointly driving the development of the platform:

1. Inject funds and liquidity into the protocol
2. Maintain the stability and balance of the platform
3. Improve Transparency and Fairness

Summary

The dual-token economic model of the Phoenix Network is a core component of its decentralized derivatives trading platform. PEX, as the governance token, supports platform governance and development while incentivizing user participation through a reward mechanism. WIN, as the contribution value token, rewards contributors who promote user growth and accelerates the release of PEX staking rewards through a burning mechanism. The interaction between the two tokens achieves economic balance within the protocol, enhances platform transparency and fairness, and protects user interests and rights.