Tokenomics
The $TAX token is the native utility and governance token powering the TaxChain protocol. It is designed to create long-term value alignment between users, developers, validators, advisors, and the broader DAO ecosystem.
$TAX is not just a governance token—it serves as a medium of exchange for protocol services (e.g., tax reports, advisor access), a staking and security asset, and the unit through which contributors are rewarded and protocol growth is financed.
The tokenomics model is disinflationary, usage-linked, and optimized for sustainable ecosystem development.
Total Supply
Initial Max Supply (Genesis): 250,000,000 $TAX
Inflation Model: Linear disinflation from 5% to a floor of 1% over 10 years
Burn Mechanism: A minimum of 10% of all usage-based fees are burned permanently
Token Allocation Table
Category
Allocation
Tokens
Vesting Schedule
Protocol Rewards
30%
75,000,000
Emitted via staking, validator & plugin rewards over 8–10 years
Team & Founders
8%
20,000,000
12-month cliff, then linear over 36 months
Strategic Investors
14%
35,000,000
6-month cliff, then linear over 24 months
Ecosystem & Partnerships
12%
30,000,000
Rolling unlock based on milestones (DAO-governed)
TaxChain DAO Treasury
10%
25,000,000
Fully controlled by DAO multisig
Advisors & Legal
4%
10,000,000
6-month cliff, then linear over 24 months
Liquidity Provision
17%
42,500,000
Immediate partial unlock (25%), rest over 18 months
Community Airdrop
5%
12,500,000
20% TGE, 80% linear over 12 months
Emission Model
Year 1 Inflation: 5% annual (≈ 12.5M new tokens/year)
Reduces by 0.5 pp/year until reaching 1% floor by Year 9
Inflation routed to:
Validator/staker rewards
Plugin developer incentives
Strategic treasury reserves
Community contribution pools (via DAO)
Deflationary Pressure
The $TAX model includes built-in token sinks:
Service Fees (reports, API)
10%
All user payments burn a portion of tokens used
ZK Certificate Issuance
10–20%
High-fee zero-knowledge attestations burn a higher percentage
Slashing Penalties
100%
Misbehaving validators/plugin authors are slashed and burned
At network maturity (post-Y5), protocol modeling indicates that net deflation is expected, with burned tokens exceeding inflation in active usage scenarios.
Liquidity & Treasury Management
Liquidity will be bootstrapped on Arbitrum and Ethereum, with LPs incentivized via protocol emissions (from the “Liquidity Provision” allocation).
Treasury-managed assets (DAO share of fees + unallocated $TAX) are governed by multi-sig + on-chain proposals, used for:
Legal support in new jurisdictions
Security audits
Integration grants (wallets, exchanges)
Strategic liquidity operations
📈 Long-Term Vision
$TAX’s role will continue to evolve as TaxChain becomes the compliance layer for DeFi. Future developments such as protocol insurance, fee-based staking, and real-world asset integrations will be mediated through $TAX as the collateral and governance currency of a global tax intelligence network.
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