> For the complete documentation index, see [llms.txt](https://leverup.gitbook.io/docs/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://leverup.gitbook.io/docs/liquidity-layer/trader-flywheel/tokenomics.md).

# Tokenomics

<figure><img src="/files/Q8UCfLbSPXBODbWpXgtr" alt="" width="563"><figcaption></figcaption></figure>

To strengthen trader incentives, LeverUp introduces a dedicated Token Design mechanism.\
Each epoch, the protocol distributes token emissions directly to traders as rewards, while simultaneously using 100% of protocol fees for buybacks to preserve intrinsic token value.

Beyond short-term incentives, the design is structured to reward long-term holders and loyal users, aligning token value with sustained participation and ecosystem growth.

#### A Unified Token, Multiple Forms

At its core, the system revolves around a single token: $LV

This token can exist in multiple forms depending on its usage within the ecosystem, but fundamentally represents the same underlying value

#### <img src="/files/I2UeELFBE8zWN90oKrjW" alt="" data-size="line"> LV

LeverUp Native Token

#### <img src="/files/VdCJNv8hrNDCLjYXMdRy" alt="" data-size="line"> xLV

Staked version of LV with rebasing design

#### <img src="/files/0nMiBDRWhGX6ZOhZ6nuT" alt="" data-size="line"> yLV

Liquid wrapped version of xLV

***

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#### <img src="/files/I2UeELFBE8zWN90oKrjW" alt="" data-size="line"> LV

LV is the native token for LeverUp traders

**How to Earn LV**

* Trading
  * Points are awarded based on trading volume, PnL, and related performance metrics.
* Referrals

[Learn More](/docs/liquidity-layer/usdlv-point-system.md)
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{% column width="58.333333333333336%" %} <img src="/files/VdCJNv8hrNDCLjYXMdRy" alt="" data-size="line"> xLV

### xLV Exit Mechanism

LeverUp introduces exit model designed to align incentives without relying on rigid lock-ups.

When a user exits their xLV position early, the portion of tokens forfeited is redistributed entirely to existing xLV stakers on a pro-rata basis.

This mechanism establishes a flywheel of loyalty and rewards, ensuring that:

* Incentives grow with protocol scale
* Stayers are rewarded without lock-up constraints
* No external wrappers are required

To further enhance flexibility, yLV is introduced as a liquid representation of xLV, offering users a wrapper-free way to maintain liquidity while participating.

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#### Exit Rebase

* Any xLV tokens forfeited due to instant exits will be streamed to active stakers.
* Rewards are claimable in proportion to xLV staker positions after each epoch transition.
* This functions both as dilution protection and as an additional incentive layer for committed participants.

By discouraging exits and redistributing penalties(50%) to long-term holders, the system directly rewards loyalty and reinforces stability.

#### Unstaking staked xLV

Based on the design of [socialized loss](/docs/liquidity-layer/lvusd-stablecoin.md#layer-1-depeg-on-protocol-layer-socialized-loss) , xLV stakers play a role in ensuring the protocol remains functional and stable

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#### xLV <-> yLV

Since xLV is a rebasing token, to further enhance flexibility, yLV is introduced as a liquid representation of xLV, offering users a wrapper-free way to maintain liquidity while participating

The yLV -> xLV convert rate will be based on the xLV amount in yLV vault, in general, protocol fees buy back xLV, which results in a higher convert rate, that is to say, holding yLV will automatically increase the position of xLV
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#### Protocol Fee Incentive

Protocol fee incentives are weighted by the ratio between staked xLV and xLV in the yLV vault

* Staked xLV users receive USDC directly from protocol fees
* yLV users receive xLV — the protocol buys back $LV and stakes it into xLV as incentives
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***

## LV Tokenomics

<table><thead><tr><th width="231.9375"></th><th width="156.4765625">Amount</th><th width="129.42578125">Alloc %</th><th>Note</th></tr></thead><tbody><tr><td>LV Genesis Airdrop(S0,S1)</td><td>100,000,000</td><td>10%</td><td>S0 and S1 will be the only 2 seasons for genesis airdrop</td></tr><tr><td>Trader Incentives Emission</td><td>600,000,000</td><td>60%</td><td><a href="#emission">Bonding Curve Vesting</a><br>0% unlocked at TGE, unlocked weekly after Season 1 by epoch emission algorithm</td></tr><tr><td>Liquidity</td><td>50,000,000</td><td>5%</td><td>100% unlocked at TGE</td></tr><tr><td>Team &#x26; Core Contributor</td><td>100,000,000</td><td>10%</td><td>6 months cliff<br>12 months vesting</td></tr><tr><td>Public Sale</td><td>10,000,000</td><td>1%</td><td>100% unlocked at TGE</td></tr><tr><td>Treasury</td><td>140,000,000</td><td>14%</td><td>20.7% unlocked at TGE remaining 79.3% vesting after a 6-month cliff, then monthly linear over 12 months</td></tr></tbody></table>

Initial Supply: 90,000,000\
Total Supply: 1,000,000,000\
$LV at TGE: 9%

{% hint style="info" %}
Allocations in xLV: Genesis Season 1 / Team & Core Contributor\
Allocations in LV: Public Sale/Liquidity/Treasury/Trader Incentives Emission
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### Emission

Weekly emission of $LV will be distributed to traders based on $LV Point

<table><thead><tr><th width="191.64453125">Epoch</th><th>$LV Emission</th><th>Note</th></tr></thead><tbody><tr><td>Epoch 0</td><td>3,744,000</td><td></td></tr><tr><td>Epoch 1</td><td>4,564,685</td><td>20% Increase</td></tr><tr><td>Epoch 2</td><td>5,117,559</td><td>10% Increase</td></tr><tr><td>Epoch 3</td><td>5,695,950</td><td>9% Increase</td></tr><tr><td>Epoch 4</td><td>4,894,743</td><td>16% decrease</td></tr><tr><td>Epoch 5</td><td>3,742,046</td><td>25% decrease</td></tr><tr><td>Epoch N</td><td>/</td><td>1% weekly decay</td></tr></tbody></table>

Total supply asymptotically approaches 1B tokens

#### Elastic Emissions

Emissions may be adjusted by up to ±35% per epoch based on protocol fee in order to maintain sustainable inflation

* Increase in Emissions: When protocol fees consistently exceed emissions over multiple epochs, or when revenue growth catalysts are expected.
* Decrease in Emissions: When protocol fees fall significantly below emissions over multiple epochs, or when revenue decline catalysts are anticipated.

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