# Token Economics

Token Supply: 1,000,000,000 (1 Billion) SWEET Tokens&#x20;

The utility and value of the token will come from 3 different token characteristics.

1\) Token backed by assets

2\) Liquidity service fee collection

3\) Governance token

## 1) Token backed by assets

Each SWEET token is backed by a basket of assets (e.g. ADA, COTI, USDC..etc) in the Sweet treasury, giving the SWEET token intrinsic value. &#x20;

By backing each token it also means that each token has a theoretical minimum price that the token should not fall under. This should give the SWEET token some price stability.&#x20;

## 2) Liquidity service fee collection

We believe that the value of the sweet tokens should be derived from the economic value that the protocol captures. With each swap that happens on SweetDAO's DEX, buyers and sellers will pay a small trading fee that the protocol collects in the "Candy Store".&#x20;

SweetDAO's protocol will possess unique incentives for network participants by introducing the liquidity service charging fee. By providing liquidity services and creating the market, liquidity service providers supply an important service to the Sweet Protocol. For providing this liquidity service, SWEET token holders will be able to charge fees to the Sweet Protocol for the liquidity services rendered.  On a set schedule the Sweet Protocol will automatically pay these fees to liquidity service providers from the trading fees what were collected in the "Candy Store".&#x20;

The amount that can be charged by SWEET token holders is proportional to the number of SWEET tokens they possess and have staked. By directly tying the token and economic value that the protocol collects our team hopes to avoid the pump and dump behaviour that happens within the crypto community.

## 3) Governance token

SweetDAO's protocol will be governed by the individuals that own the Sweet Protocol's tokens. We are a community-run project, governed by the community where token holders can vote for all major changes to the Sweet protocol. The project will launch as a Decentralised Autonomous Organisation (DAO). It is our hope that the owners of the token have the best interest of the DAO and protocol in mind and that they actively participate.&#x20;

Participation can happen in many forms such as creating proposals, voting on proposals, being involved with the community, promoting the project, helping to grow the community. If you are developer you can build other services that might be sources of service fee collection. Most importantly community members need to provide liquidity services for this project to succeed.

\
\\
