> For the complete documentation index, see [llms.txt](https://docs.filliquid.io/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://docs.filliquid.io/economics/fig-token.md).

# FIG Token

FIG is the governance token for the FILLiquid ecosystem and serves as its native cryptocurrency with a primary function of acting as a governance tool.

The FIG governance token holds significance in the protocol's decision-making process and voting on protocol improvements and parameter adjustments. For instance, when modifying the

Optimal Utilization Rate U1 for the Borrowing Interest Rate: users can cast their votes by staking their FIG tokens in favor of their preferred proposal.

The token comes with a 2 billion total supply and will be allocated to the following parties:

* Early investors
* Team members
* FILLiquid Foundation
* Reserve
* Liquidity Providers
* Borrowers based on pre-determined rules.

The distribution of these breakdowns are as follows;

<figure><img src="/files/QKpIKKdkInzHPv3tPoGX" alt=""><figcaption></figcaption></figure>

Additionally, the FIG token serves as an early incentive and transaction fee subsidy for users who both stake FIL and borrow FIL from the protocol.

FIG can be securely stored, transferred, and traded.

The FILLiquid protocol relies on the active participation of Liquidity Providers and Borrowers, who both play crucial roles in the protocol's operation and governance process. These participants have the opportunity to access incentives through various channels, including the allocation of governance tokens called FIG.

To ensure a fair and reasonable distribution of FIG tokens, an emission model has been designed, taking into account several key factors:

* **Incentivizing early participants:** The emission model aims to reward early participants by continuously reducing the emission rate over time. As a result, users are encouraged to participate in the protocol earlier to help foster its growth and stability.
* **Encouraging loan repayment and longer staking:** Borrowers are incentivized to repay their loans earlier, while Liquidity Providers are encouraged to stake their funds for longer durations. This incentivization mechanism promotes responsible borrowing behavior and rewards liquidity providers for providing long-term support to the protocol.
* **Correlated with loan amount and staked amount:** The amount of FIG distributed positively correlates with the loan amount for borrowers and the staked amount for liquidity providers. This ensures that participants contributing the most to the protocol receive higher rewards.
* **Extra compensation for the opportunity cost of capital:** FIL depositors are granted higher incentives to compensate for the opportunity cost they incur by locking up their funds. This recognizes the value they bring to the protocol and encourages them to continue their stake.


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