docs_tfgrid4/docs/tokens/tokenomics.md

---
sidebar_position: 1
description: Learn about the ThreeFold V4 tokenomics.
---

# Tokenomics

![](../img/inca_tokens.png)

INCA is our utility like token empowering the ThreeFold Grid.

Farmers generate **IN**ternet **CA**pacity and earn INCA tokens:

- **Proof of Capacity**
  - Substantian rewards are available to farmers for providing capacity in strategic locations in the world.
- **Proof of Utilization** 
  - 90% of the INCA as used to buy the Internet Capacity goes to Farmers and their Farming Pools.

Users use INCA tokens to deploy web solutions on top of the ThreeFold Grid.

- It is compatible with any AI, Web2, Web3 and Web4 solution.
  
## INCA = **IN**ternet **CA**pacity

The **INCA token** allows anyone, anywhere, to access the ThreeFold ecosystem. 

- **ThreeFold** is a self-healing data, network, and cloud Internet infrastructure laying the foundation for Web4. 
- It is composed of nodes, routers, and phones, all connected to the **ThreeFold Grid** and compatible with the current Internet.


### Technology and Tokenomics

- The technology behind ThreeFold is **rock solid**, tested for years on mainnet. With INCA, we now enter the expansion phase to grow the grid to millions of nodes.
- **Liquidity optimization** is a key goal, enabled through an innovative, fiat-ready, and cross-chain marketplace.
- Over **70% of the INCA supply** is allocated to the **community**, ensuring that the INCA tokenomics supports **organic expansion** and provides resources for ThreeFold community members to thrive and build.
- The **INCA release** guarantees a **fair and resilient distribution**, fostering a strong and sustainable ecosystem.

ThreeFold V4, powered by INCA, represents a transformative step toward a decentralized, scalable, and resilient future for the Internet. Together, we are building the foundation for **Web4**.


## Basics of the Tokenomics

### Distribution

![](img/token_evolution.png)

The ThreeFold INCA token distribution is carefully crafted to ensure a major allocation to the community. There can never be more than 4 billion tokens.

> The tokens are released over 10 years to the benefit of the community.

By prioritizing community growth, we're creating a collaborative environment where everyone can benefit from their contributions and participate in the project's success. This balanced distribution ensures that a significant amount of tokens is dedicated to the community, creating opportunities for growth and development within our ecosystem.


```mermaid
pie
    "Farmers and Tech": 60
    "Community Expansion Rewards": 5
    "Grants": 5
    "Liquidity Providing": 2.5
    "ThreeFold Treasury": 3.8
    "Investors": 11.3
    "Team": 12.5
```

- **60%: Farmers and Tech**
  - People expanding the network with Router & Node capacity over the multiple releases
  - 19.4%: Farmers & Tech ThreeFold Grid 1-3 (+95% minted, Nov 2024)
  - 40.6%: Farmers ThreeFold Grid 4+ (0% minted, Nov 2024)
- **5%: Community Expansion Rewards**
  - Promotion of the TFGrid, Marketing Activities, ... 
- **5%: Grants**
  - We want to expand and build our project together with the community
- **2.5%: Liquidity Providing**
  - DEX, Exchanges, etc.
- **3.8%: ThreeFold Treasury**
- **11.3%: Investors**
- **12.5%: Team**


> Do note this table is still under deliberation and can change.

## INCA Token

The ThreeFold INCA tokenomics for ThreeFold has been designed to promote an active ecosystem of cloud users, farmers, and validators. 

It presents a robust liquidity strategy that ensures seamless transfers and secure transactions within our cloud marketplace. 

> Farming and rewards are made available over 10 years.

The proof-of-utilization rewards are distributed in a simpler manner:

- 80% goes to the farmer hosting the node
  - As a reward to provide resources to users
- 10% goes to the Farming Pool
  - As a reward to provide support, SLA, etc.
  - There can be farming pools which maintain other split (its up to farmers to select their famingpool)
- 10% to ThreeFold, Guardians, Validators
  - As a reward to host, stabilize and secure the grid

The following chart provides an overview of the INCA ecosystem:

```mermaid
flowchart TD
    A[Cloud User] -->|CHF/EUR/...| B(CLOUD MARKET PLACE<br>Discount based on position<br>in TF Liquidity Pool.)
    A[Cloud User] -->|CHF/EUR/...| B2((ThreeFold<br>Liquidity Pool))
    B2 -->|TFT or INCA| B
    B -->|TFT or INCA| C{Proof of Utilization}
    G[FARMING GRANTS<br>40m Tokens / Month]-->  I{Proof of Capacity<br>uptime, location, ...} --> D
    C -->|80%| D[ThreeFold Farmers]
    C -->|10%| E[Farming Pool]
    C -->|10%| F[ThreeFold, Guardians, Validators]
  ```


### Expansion Phase of the Grid

ThreeFold is now entering the **expansion phase** of the grid, aiming to grow to millions of nodes. To achieve this bold goal, we are launching the **INCA token**, the continuation of the **ThreeFold Token (TFT)**:

- **TFT**, capped at 1 billion tokens, has supported us for years, enabling the development of the most advanced and complete decentralized cloud engine.
- Our new token, **INCA**, continues TFT's legacy. Each TFT can be converted into INCA on a **1:1 basis**, with **vesting over 18 (might become 24) months**.
- **INCA** is our **DePIN token** (Decentralized Physical Infrastructure Network) that will fund the expansion to a planetary scale.

> **Note:** Currently, TFT is available on Stellar, Ethereum, BNB Smart Chain and TFChain. Soon, we will implement a bridge to Solana. TFT reflects the foundational work of the existing ThreeFold Community. **INCA** serves as our launch token for potentially one of the largest and most meaningful projects in the DePIN space.