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

# LIQ Token Economics

## Overview

LIQ is the governance and incentive token of the iAERO ecosystem, designed with a deflationary emission schedule and multiple value accrual mechanisms.

## Token Specifications

* **Token Name**: Liquid
* **Symbol**: LIQ
* **Max Supply**: 100,000,000 LIQ
* **Decimals**: 18
* **Token Type**: ERC20 with Permit

## Supply Distribution

Total Supply: 100,000,000 LIQ ├── Community Emissions: 30,000,000 (40%) ├── Treasury Vesting: 10,000,000 (10%) ├── Team Vesting: 10,000,000 (10%) ├── Investor Vesting: 30,000,000 (20%) └── Remaining: 20,000,000 (20%) - Protocol reserves

## Emission Schedule

### Community Emissions (60M LIQ)

LIQ follows a halving schedule for community emissions:

* **Initial Rate**: 1 LIQ per 1 iAERO minted
* **Halving Interval**: Every 5,000,000 LIQ minted
* **Treasury Take**: 20% of all user emissions

#### Halving Timeline

| Milestone | Total Minted | Emission Rate | Per iAERO  |
| --------- | ------------ | ------------- | ---------- |
| Start     | 0            | 1.0x          | 1.0 LIQ    |
| Halving 1 | 5,000,000    | 0.5x          | 0.5 LIQ    |
| Halving 2 | 10,000,000   | 0.25x         | 0.25 LIQ   |
| Halving 3 | 15,000,000   | 0.125x        | 0.125 LIQ  |
| Halving 4 | 20,000,000   | 0.0625x       | 0.0625 LIQ |
| ...       | ...          | ...           | ...        |

### Vesting Schedule (20M LIQ)

20% of supply is linearly vested over 3 years:

* **Treasury**: 10,000,000 LIQ (3 years linear)
* **Team**: 10,000,000 LIQ (3 years linear)
* **Daily Release**: \~9,132 LIQ per day per stream
* **Vesting Contract**: LIQLinearVester.sol

## Value Accrual Mechanisms

### 1. Staking Rewards (80% of Protocol Revenue)

LIQ stakers receive the majority of protocol rewards:

Protocol Revenue Flow: ├── 80% → LIQ Stakers (via TreasuryDistributor) └── 20% → Treasury Operations

### 2. Governance Rights

LIQ holders control:

* Voting on protocol parameters
* Treasury allocation
* Strategic partnerships
* Protocol upgrades

### 3. Deflationary Pressure

* **Capped Supply**: Hard cap at 100M
* **Halving Emissions**: Decreasing inflation over time
* **Burn Mechanism**: Users can burn LIQ tokens

## Staking LIQ

Stake LIQ to earn protocol revenues:

* **Contract**: StakingDistributor (for LIQ staking)
* **Rewards**: 80% of treasury's 10% protocol fee share
* **Tokens**: AERO, USDC, ETH, and other bribes
* **Compounding**: Auto-compound by restaking rewards

## Treasury Management

The protocol treasury receives:

* 20% of all LIQ emissions
* 10% of all protocol fees
* Vested allocation (10M over 3 years)

Treasury funds are used for:

* Protocol development
* Liquidity provision
* Strategic partnerships
* Security audits