Token economic model

OmniPact Protocol ($PACT) Tokenomics Framework v1.0

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The Economic Engine for Decentralized Commerce

• Version: 1.0 (Final Draft)

• Date: January 2025

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Executive Summary

$PACT is the native utility token of the OmniPact protocol, aiming to capture the value of global decentralized commerce (DeCom). Its economic model design follows the "Value Accrual" principle and builds a moat through the following three layers of logic:

1. Work Token (means of production): Only by staking $PACT can one run an arbitration node and earn cash flows from Tokens such as ETH/BNB/USDC.

2. Deflationary (deflationary spiral): Protocol revenue is automatically used to repurchase and burn $PACT, directly converting network growth into token scarcity.

3. Governance Alignment (long-term binding): Adopt the veToken model, bind voting rights with the lock-up period, and eliminate short-term speculative governance.

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Utility & Value Capture

$PACT is not just a "governance token"; it is the fuel and license for the entire OmniPact economy.

Staking for Jurors

• Mechanism: To become a validation node (arbitrator) of the DAN network, one must stake at least 10,000 $PACT($S\_{min}$)。

• Value Logic:

  • As the protocol's TVL grows, the demand for arbitration increases. $\rightarrow$ Arbitration fees have increased.

  • High returns attract more nodes to join $\rightarrow$ It is necessary to purchase $PACT for staking from the market.

  • Conclusion: Business growth directly leads to the locking of $PACT, reducing the circulating supply.

• Slashing: Malicious arbitration will result in the confiscation and destruction of the staked funds.

Buyback & Burn

To achieve the long-term growth of $PACT's value, OmniPact has introduced a deflationary model called "The Black Hole". We commit to using a large portion of the economic value captured by the protocol to repurchase and permanently destroy $PACT until the total supply is reduced to 12% of the initial total supply (i.e., 120 million tokens). This mechanism ensures that every collateralized transaction occurring on the OmniPact network, on a micro level, increases the scarcity of $PACT.

• Revenue stream: The protocol charges 0.5% - 1% of each guaranteed transaction amount as Protocol Fee.

• Value logic: Introduce continuous purchasing pressure. Even if there are no new users entering the market, as long as existing users are trading, the currency price will have deflationary support.

1. Buyback & Burn Engine

—— Convert protocol revenue into token purchases

The service fees charged by the OmniPact protocol (usually 0.5%-1% of the transaction amount) are mainly deposited in the treasury in the form of mainstream assets (such as USDT, USDC, ETH). We will enable smart contracts to automatically execute repurchases:

• Income distribution: 20% - 40% of the protocol revenue (the quarterly ratio is determined by DAO voting) will be allocated to the "burn pool".

Automated execution: · Smart contracts publicly execute market buy operations on decentralized exchanges (DEX, such as Uniswap/PancakeSwap) on a regular basis (e.g., weekly). · The purchased $PACT tokens do not enter any wallet, but are directly sent to the Null Address (Null Address / 0x00...dead) in an atomic transaction.

·On-chain audit: Every Tx Hash repurchased and destroyed is published on the official website and can be verified by anyone, eliminating the "fake destruction" problem common in centralized exchanges.

·The remaining fund income is injected into OmniVault as an insurance fund.

2. Native Utility Burn

—— Payment means destruction

For scenarios where $PACT is directly used to pay for protocol service fees or value-added service fees, we will implement a 100% full destruction strategy.

• Service fee destruction: When users use $PACT to pay the guarantee fee in order to enjoy a rate discount, this $PACT will be directly destroyed and will no longer enter the national treasury for circulation.

• Destruction of ecological tickets:

• Advertising fees for merchants' bidding rankings.

• Advanced call fees for third-party APIs.

• Registration fee for IoT devices.

• All the above fees are paid in $PACT and directly destroyed.

3. Slashing Burn

—— The cost of the wrongdoer becomes the bonus of the holder

In the DAN arbitration network, to maintain fairness, we convert the assets of wrongdoers into fuel for the entire network's deflation.

• Arbitrator Misconduct: When an arbitrator is proven to have accepted bribes or voted maliciously, their staked $PACT will be confiscated (Slash). 50% of it will be injected into the insurance fund, and the other 50% will be directly destroyed.

• False appeal: If a buyer is determined to have maliciously initiated a false dispute to extort the seller, their pledged arbitration deposit will be confiscated and destroyed.

4. Dust Cleanup

To optimize the size of the ledger and reduce invalid UTXO/account states, the protocol allows users to convert tiny amounts of "dust" $PACT in their wallets that are insufficient to cover Gas fees into protocol Credits with one click, and these dust tokens will be collectively collected and destroyed.

vePACT Governance

• Mechanism: Users can obtain vePACT (non-transferable) by locking $PACT.

• Rights:

  1. Governance rights: Determine rate parameters and whitelists.

  2. Boost: vePACT holders receive a return bonus when engaging in "transaction mining" or "arbitration".

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Emission Schedule

We have designed the token release as a "Disinflationary" model to prevent early hyperinflation.

• Year 1: Radical release period. The focus is on subsidizing early users (Trade-to-Earn) and market making. The expected circulation volume will reach 16%.

• Year 2-3: Halving period. Ecological rewards are halved, with the focus shifting to organic growth. The circulation volume reaches 55%.

• Year 4-5: Wake period. Linear low-speed release, at this time, the intensity of repurchase and destruction should have exceeded the inflation rate, achieving "Net Deflation".

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Token Flow Diagram

1. User pays handling fees (USDC/ETH, etc.).

2. Smart Contract distribution fee:

   • $\rightarrow$ Jurors: Obtain work income.

   • $\rightarrow$ Treasury: Automatically execute the Buyback of $PACT.

3. $PACT be destroyed (Supply $\downarrow$)。

4. Jurors Need to purchase more $PACT for staking to increase the order-taking weight(Demand $\uparrow$)。

5. Holders Lock $PACT as vePACT to increase the yield rate (Lock $\uparrow$)。

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Strategic Advantages for Investors

• No "Ponzi" Yield: Returns come from real commercial cash flows (RWA/e-commerce/services), not money printing.

• Low Initial Float: TGE Only ~6.9% is in circulation, with extremely low selling pressure, making it easy for market capitalization management.

• Long-Term Alignment: Both the team and early investors have a 1-year cliff, which eliminates the risk of "dumping immediately after going online" and demonstrates their determination for long-term development.

• Regulatory Safety: Adopting "buyback and destruction" rather than "direct dividend distribution" to reduce the legal risk of being deemed a security (Security).

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Adjustments made according to development.