# Native Token: APX

APChain adopts a **dual-token architecture**, consisting of the **native utility token APX** and the **stablecoin USDA**.\
These two tokens complement each other in powering the network and driving ecosystem growth.

### <mark style="color:orange;">Native Token: APX</mark>

**Functional Roles**

APX is the core **utility and security token** of APChain. Its use cases include:

* Paying **gas fees** (for transactions and smart contract calls)
* **Staking and validator rights credentials**
* **Sequencer bonds and collateral for cross-Rollup settlements**
* Paying for **data availability (DA) fees**
* Serving as the **settlement currency in the AI computing and data marketplaces**
* **Network governance**, including proposals, voting, and protocol parameter adjustments

### <mark style="color:orange;">**Deflation and Fee Distribution Mechanisms**</mark>

* **Base fee burn:** A portion of base fees is automatically burned to curb long-term inflation and create token scarcity.
* **Priority fees and MEV revenue:** Distributed to validators, stakers, and the ecosystem fund.
* **AI task fees:** Split proportionally among computing nodes, model providers, data contributors, and the ecosystem fund.

### <mark style="color:orange;">**Issuance and Inflation Model**</mark>

* **Initial supply:** 1 billion APX (to be finalized)
* **Dynamic inflation rate:** Starts at a baseline 3% and auto-adjusts according to the on-chain staking ratio
  * **Low staking ratio → increases inflation** to encourage more staking
  * **High staking ratio → decreases inflation** to maintain stable yields
* **APR curve:** Algorithmically balances inflation and staking ratio to ensure long-term economic security.

### <mark style="color:orange;">**Penalties and Incentives**</mark>

* **Misbehavior penalties:** Offline downtime, double-signing, or malicious behavior will trigger slashing of staked tokens.
* **AI-related fraud (fake inference results, data tampering)** will face **heavier penalties**.
* **Positive contributions** such as providing computing power, risk-control models, or compliance data will earn **additional rewards**.


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