Vulcan Protocol
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Why Disabilities?
Etna Lab: Research & Development
Vulcan's AI Products
Learning & Development
Vulcan Business Model
Tokenomics
Fundamentals
Demand/Supply Mechanism
We are all aware that the goal of healthy tokenomics is to raise demand for the token while decreasing supply. Therefore, Vulcan tokenomics is actually built for long-term viability.
Raising Demand and Decreasing Supply
Supply-side Mechanism
Token emission
The Vulcan token ecosystem's primary source of supply is tokens issued to reward Vulcan Heroes for the development of data sets. Annual inflation is between 13% and 28%. However, 50% of the tokens will be restricted for a period of one year. The rate of sudden inflationary pressures will be reduced to between 7.5 and 14% annually. After one year they will be gradually released linearly for 52 weeks to Vulcan Heroes.
Presales selling pressure
Tokens purchased during the presale round will be unlocked after two years. After two years, the tokens will be released gradually and linearly over the period of 52 weeks.
However, the majority of our presale investors are long-term investors; after the unlock period, they may simply sell out to square their investment and hold the remainder of the token for the long term.
Demand-side Mechanism
Products and services redemption
Customers of Vulcan can purchase Vulcan tokens to use as redemption for Vulcan's products and services at a discount compared to fiat currency. Even if customers pay using fiat, we use that money to buy back Vulcan tokens from exchanges, increasing the demand for Vulcan tokens.
Long-term investment
Despite the fact that Vulcan token is a utility token, tokenomics allows Vulcan token to function as both a utility token and an investment token at the same time through the token buyback mechanism.
Stocks are an often mentioned asset class when looking for similarities for investment tokens in the traditional financial realm. This is especially true for tokens that operate on a supply reduction basis. There is always a clear relationship between cash flow generated in the service and the value of tokens burned, just as there is a direct relationship between net profits generated and equities market buybacks.
When a corresponding token burn or equity buyback is undertaken, the ensuing impact for token holders and shareholders is comparable. A stock buyback increases the proportional ownership of each outstanding share in the total company value, whereas a token burn increases the proportional ownership of each token in the entire protocol value.
If the price of Vulcan token accidentally falls (for any reasons) in comparison to the annual buyback amount, the fundamental valuation of Vulcan tokens will be cheaper and more appealing to long-term investors. They that comprehend Vulcan's cashflow potential will purchase and hold Vulcan tokens for the long run.
Arbitration
With Vulcan's pegged pricing model, when the market price of Vulcan tokens falls, the price of Vulcan's products and services falls as well. Customers can buy Vulcan tokens from the exchange and use them to pay for Vulcan's products and services at a lower cost than if they paid in cash. This will increase market demand for Vulcan tokens naturally.
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