> For the complete documentation index, see [llms.txt](https://hedgehog-protocol.gitbook.io/main/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://hedgehog-protocol.gitbook.io/main/hog-token-governance/tokenomics.md).

# Tokenomics

HOG token is an ERC20 utility token. Initially, it serves as a governance token for the protocol. In addition to that, HOG token holders can stake their tokens to earn rewards and participate in the ecosystem's growth via different token sinks: minting, staking, etc.\
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**Symbol**: HOG\
**Supply**: 100,000,000\
**Blockchain**: L2 TBA<br>

### Token Distribution

<table><thead><tr><th>Total Supply</th><th>DAO</th><th>Team</th><th width="144">Investors</th><th>Incentives</th></tr></thead><tbody><tr><td>100,000,000</td><td>47,000,000</td><td>25,000,000</td><td>16,000,000</td><td>12,000,000</td></tr></tbody></table>

Incentives (12%)

* Engage and build momentum in the community;
* Incentivize dApp adoption;
* Others (TBD)

Investors and Liquidity (16%)

* Early backers supporting the project's vision;
* Future investors;
* Ensure ample liquidity for the token upon launch.

Team (25%)

* reserved for current and future team members;
* ongoing research;&#x20;
* development;
* future funding.

DAO (47%)

* Unlocked but not under team control;
* Represents shared community governance;
* Use will be decided by the community.

Vesting Details:

* The lockup for pre-seed is 4 months cliff lockup since TGE and then 25% portions unlocking every 4 months. As such, it’s just a bit over 1 year (16 months). We believe that cliff unlocks can be a better solution, as communities have been confused with gradual per-block vestings that DeFi projects did throughout the last cycle.
* The lockup for the company and team will naturally be longer than for investors.<br>

Additional Notes:

* The distribution percentages are initial estimates. Practical implementation may differ, especially before the DAO launch.
* The DAO, owning approximately half of the total supply, can decide on modifications or additional allocations post-launch.
* Our goal is to ensure flexibility and adaptability to cater to unforeseen requirements and strategic changes.

DAO Supply Insights:

* Immediate issuance of a significant DAO supply, like the 47% in our case, allows for a potential "no-more-mint" restriction on the ERC20 token, adding a layer of trust and security.
* If the full DAO supply isn't issued upfront, it typically necessitates enabling the DAO multisig to issue more tokens in the future. This can be perceived as less secure.
* Pre-issuance is likely a common approach among DAOs for these reasons.