Protocol Revenue Token ($AAA)

Overview

The Arcanum protocol token is designed with a clear and mature utility, moving beyond common tokenomic models. Its architecture is founded on a direct and transparent principle: the token's value is a direct derivative of the protocol's success. Unlike many other tokens, its worth is not based on speculation but is intrinsically linked to the revenue and performance of the Arcanum ecosystem.

In traditional finance, investors associate a company's stock price with its valuation, which is derived from market success and profitability. Arcanum adapts and enhances this principle for its native token.

While dividend-paying stocks distribute a portion of company profits directly to shareholders, Arcanum replaces this model of value extraction with a model of perpetual value accrual. Instead of being paid out, 100% of the Arcanum protocol's revenue is programmatically used to increase the intrinsic value of the token itself. This mechanism ensures that all success and revenue generated by the ecosystem are compounded directly within the token, aligning the interests of the protocol and its holders toward long-term capital appreciation.

This type of value accrual mechanism is often referred to as creating a floor price. In Arcanum's model, 100% of protocol revenue is directed towards systematically supporting the token, creating a foundational layer of intrinsic value that grows over time. This ensures that the token is perpetually backed by the cumulative success and earnings of the entire protocol.

This mechanism allows each token holder to have a proportional claim on the protocol's treasury. Consequently, it becomes economically irrational for the token to trade on any secondary market at a price below the value of its underlying treasury assets, as this would create a direct arbitrage opportunity. This relationship establishes a strong and perpetually supported price floor for the token.

Token Liquidity

The Arcanum protocol token is unique in that it does not rely on a primary, incentivized liquid market (like a traditional AMM pool). Instead, its core liquidity pathway is defined by its relationship with the protocol itself:

• Users earn tokens through participation in the ecosystem (e.g., as liquidity provision rewards).

• Users can redeem the token at any time directly from the protocol treasury for its proportional share of the underlying collateral.

This model naturally incentivizes token scarcity, as the protocol is designed to avoid dilutive emissions that would devalue each token's claim on revenue. The floor price of the token is perpetually increased as protocol fees, collected in ETH from all TWMM pools and other revenue sources, are added to the treasury.

The Arcanum revenue token has a fixed, pre-minted supply, and its total circulating amount can only decrease through burning. Burning a token allows a holder to redeem it for a proportional share of the protocol's collected revenue from the treasury.

When a user wishes to exit their position, they have two options: sell the token on a secondary market or redeem it directly for its underlying collateral from the protocol's treasury. This dual-exit mechanism creates a unique market dynamic. The ability to redeem for a specific value from the treasury establishes a hard price floor. Consequently, the token's secondary market price is expected to trade at or above this floor, with any premium reflecting the market's confidence in the protocol's future profitability and growth.

How Fees Are Converted

The TWMM fees are collected in the form of various pools' LP tokens. To be added to the treasury that backs the protocol token, these LP tokens must be efficiently converted into ETH.

For this purpose, Arcanum will utilize an intent-based system. This system will broadcast the need to sell a certain amount of LP tokens for ETH at a fair, oracle-determined price. This creates a standing market opportunity for automated systems ("bot users"), such as arbitrageurs or solvers. These actors can fill the intent, providing the ETH to the protocol treasury in exchange for the LP tokens, ensuring a fair and perpetual conversion of protocol fees into the floor price value.