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

# Tokenomics

## **Indigo Protocol Tokenomics 🔄**

Distribution Breakdown

* Indigo Protocol’s tokenomics ensures a balanced and sustainable economic model, distributing the INDY token across various sectors to incentivize participation, reward users, and fund ongoing development over a 5-year span.

Here’s a breakdown of the INDY token distribution:

* 54.13% DAO Rewards
* 13.87% DAO Treasury
* 5% Governance Participation
* 1% Protocol Owned Liquidity
* 1% Launch Airdrop
* 25% Team & Labs Treasury

**Detailed Token Allocation 📜**

* INDY tokenomics are strategically designed to support the ecosystem's growth, governance, and operational efficiency. A significant majority, 54.13%, is allocated to DAO Rewards, ensuring that users who participate actively in the ecosystem are incentivized. The Team & Labs Treasury receives 25%, a share that funded initial development and operational support by the core team behind Indigo. An additional 13.87% is reserved for the DAO Treasury, which funds future initiatives, development, and proposals approved by the community. Governance participation is encouraged with a dedicated 5% of tokens rewarding users for engaging in the protocol's decision-making processes. To ensure token trading liquidity post-launch, 1% of INDY tokens were designated as Protocol Owned Liquidity. Finally, to distribute tokens widely and engage a broad user base, 1% was allocated for the Launch Airdrop in 2022, promoting initial liquidity and adoption. INDY is set to reach its total supply cap of 25,000,000 under [Indigo Protocol V3](/readme/indigo-protocol-v3.md), supporting the migration toward zero INDY emissions.

## **V3 Token Supply & Zero Emissions**

With [Indigo Protocol V3](/readme/indigo-protocol-v3.md), the protocol migrates toward a zero INDY emissions system:

* **V3 Launch Electorate and INDY Token Max Supply: 25,000,000 INDY**
* An estimated 11.4M INDY will remain undistributed from the Rewards allocation
* 10M INDY is reserved for a potential future burn upon DAO approval
* The remaining undistributed amount is redirected to the DAO Treasury

Revenue directed to INDY Stakers is converted from iAsset(s) in the Treasury to INDY via open market orders, ensuring distributions are non-inflationary and maximize value accrual for INDY stakeholders.