Phoenix Network log in to Blast L2 and launch a new economic model

Recently, the decentralized derivatives protocol Phoenix Network announced its official log in to Blast L2 and launched a brand new token and economic model, injecting new vitality into the decentralized derivatives sector.

Phoenix Network began its IDO on May 13 and announced the successful completion of the IDO on May 29. In just 15 days, the project reached its IDO hard cap, raising 625 ETH and exceeding $2.4 million in subscriptions. Such a booming market response has attracted attention to the Phoenix Network. This article will provide a detailed introduction to the dual-token economic model of Phoenix Network on Blast L2, including the governance token $PEX and the contribution value token $WIN.

Overview of Phoenix Network

Phoenix Network is a decentralized derivatives trading platform built on Blast L2, aimed at providing an efficient, secure, and transparent perpetual trading environment to attract more users to participate in the decentralized finance market and to provide incentives and value capture for it. The dual-token economic model of Phoenix Network on Blast L2 is an important component.

In the decentralized finance market, the economic model is crucial to the success of a project. It not only determines the token distribution and incentive mechanisms of the project but also affects the long-term development and market performance of the project. An excellent economic model can attract more investors and users, thereby driving the rapid development of the project.

Governance Token PEX

PEX is the governance token of the Phoenix Network protocol, with a maximum supply of 10 million coins. The main function of PEX is to serve as the voting rights for platform governance, and it is also the primary value storage point for various revenue streams of the protocol's derivatives exchange.

PEX is a reserve-backed cryptocurrency, with all PEX minted by the Phoenix treasury at a rate of 1 PEX for every 0.0002 ETH. Each time PEX is minted, the protocol will charge a 10% minting tax.

PEX's minting and issuance

The issuance and minting process of PEX is closely related to the development history of the Phoenix Network. In the early stages of the project, a genesis minting was conducted through an IDO, with a total of 333,333 PEX coins. Among them, 33,333 PEX (10%) were allocated as minting tax, and 300,000 PEX (90%) were used for IDO distribution and to add initial liquidity. The IDO price was 0.0025 ETH, and the initial listing price was 0.0031 ETH.

Except for the PEX minted by Genesis, subsequent issuance of PEX can only be minted through bond sales. By selling LP bonds, the treasury holds 100% liquidity of the PEX-ETH trading pool.

The minting tax of PEX is used for the technical development and maintenance of the protocol, rewards for community node users, and development funds. Over time, the actual circulation of early PEX will gradually increase, but due to various factors such as the value of treasury assets, the price of PEX, and the profit from positions in derivative exchanges, it will enter a deflationary phase in the mid to late stages, with its actual circulation being far below 10 million.

The risk-free value of treasury assets ( Treasury-RFV ) (calculated by ETH quantity) determines the upper limit of the minting amount for PEX.

circulation of PEX

1. PEX holders can earn staking rewards by staking PEX according to the Rebase cycle:

The earnings from PEX staking increase through compound interest in the form of sPEX, and can be unstaked at any time, but the compounded earnings cannot be obtained immediately. They will be released in equal amounts over 180 days according to the blocks. By burning WIN, the release speed can be accelerated to a maximum of 30 days.

2. Users can also purchase LP bonds by adding PEX-ETH LP liquidity to obtain PEX minted by the treasury. When users purchase LP bonds to obtain PEX and stake it in full, they will receive an additional reward of approximately 5% in PEX tokens.

The above are two ways for PEX to increase its circulation, with the increased circulation coming from the national treasury minting.

Destruction and Rights of PEX

The governance token PEX has a close relationship with the derivatives exchange PbTrade. The treasury acts as the short-term counterparty for all trades on PbTrade, while PEX serves as the long-term counterparty. Therefore, PEX has a strong value capture capability, and in the long run, PEX will be in a deflationary state, with its price performance expected to outperform similar products.

In most cases, traders incur losses, with 35% of the profits from the treasury position deposited into the national treasury as reserves for minting PEX, and 55% of the profits from the treasury position used for repurchasing and destroying PEX. The circulation of PEX decreases, raising its price. In extreme cases, when traders make profits and the collateral ratio of ETH is less than 100%, the treasury contract activates the reserve fund to mint PEX, which is then sold to fill the gap in the treasury ETH pool.

The ability of tokens to capture the value of the project itself determines the success or failure of the tokenomics design of the project, while 25% of the trading fees from the derivatives exchange PbTrade will be returned to PEX stakers. This means that PEX stakers can earn not only from staking itself but also from this portion of trading fee earnings.

Many DeFi protocols have a weak correlation between the governance tokens and the value of the protocol itself, leading to poor price performance due to the governance tokens' weak value capture ability. However, PEX has effectively avoided this issue.

Contribution Value Token WIN

WIN is the protocol contribution token of the Phoenix Network, with a theoretical maximum supply of 1 billion tokens. Its main purpose is to reward those who contribute to the growth of protocol users, and it can also serve as a burning mechanism to accelerate the release of WIN staking rewards.

The WIN Genesis phase will issue 1 million coins, which will be used for specific phase airdrops and rewards. Apart from the WIN issued during the Genesis, all other WIN will be minted by the protocol, which establishes an initial treasury of 10,000 USDB for WIN.

WIN minting increase

WIN is minted by users staking PEX, and the minting will consume USDB. The minted WIN is rewarded to those who contribute to the growth of the protocol's user base. The process of minting WIN will lead to an increase in the price of WIN.

To earn a high compound interest of 0.2% every 8 hours, PEX stakers need to spend an additional 20% of the value of their staked PEX (USDB) to mint WIN tokens. The minted funds will go into the USDB treasury, with 5% of the minted WIN allocated as a development fund for the protocol, and the remaining 95% will be rewarded to the referrers and node users.

The WIN coin usage ratio ( is a dynamic variable, initially set at 66%. For every additional 5 million WIN coins, the usage ratio decreases by 2%, with a minimum usage ratio of 50%, which occurs when the total amount of WIN reaches 40 million coins.

New WIN minting volume = (Minting funds * Fund utilization rate) / WIN price

WIN price = Total value of USDB treasury / WIN circulation

Due to the existence of capital utilization rate, the growth rate of the USDB treasury will always be higher than the rate of WIN issuance. The larger the amount of WIN issued, the faster the growth rate of the USDB treasury will be. Therefore, minting and increasing WIN will lead to a higher WIN price.

![What魅力 does the Phoenix Network have after completing 625 ETH in IDO fundraising in 15 days and about to deploy Blast L2?])https://img-cdn.gateio.im/webp-social/moments-d41a9eba400a3d64bb31f7e9a4c1c9b4.webp(

) WIN redemption and burning

Users who own WIN can accelerate the release speed of staked PEX earnings by burning WIN. This process destroys WIN, so burning WIN to accelerate the release of PEX staking earnings will increase the price of WIN.

In addition, users can redeem WIN for USDB from the USDB vault at the real-time price. A 15% redemption tax will be charged for redeeming WIN for USDB, and this redemption tax will remain in the USDB vault. When users redeem WIN, the total amount of WIN decreases at a rate faster than the decrease in the USDB vault, thus the redemption process will also lead to an increase in the price of WIN.

Therefore, the WIN token operates on a model of continuous unilateral price increase. To summarize: minting WIN, burning WIN, and redeeming WIN for USDB will all lead to a continuous rise in the price of WIN. The optimization of the WIN model is an important innovation following the migration of the Phoenix Network to Blast, and this mechanism will play a crucial role in the protocol launch and subsequent user growth.

![What is the charm of the Phoenix Network, which will complete the IDO fundraising of 625 ETH in 15 days and is about to deploy Blast L2?]###https://img-cdn.gateio.im/webp-social/moments-28e437f9b8a1fd68df38cf0a8b6478b0.webp(

Dual-Currency Economic Model

The governance token PEX and the protocol contribution value token WIN play different roles in the economic model of the Phoenix Network (Blast L2). The two are interdependent and mutually reinforcing, and will jointly promote the development and prosperity of the platform. Specifically, there are the following aspects:

1. Injecting funds and liquidity into the protocol: The minting and circulation of PEX and WIN can bring more funds and liquidity to the Phoenix treasury and vault, promoting the development and prosperity of the platform.

2. Maintain the stability and balance of the platform: The reward mechanism of the contribution value token WIN and the destruction mechanism that accelerates the release of PEX staking rewards promote a positive cycle of the protocol, thereby maintaining the stability and balance of the platform.

3. Improve transparency and fairness: The issuance and circulation of PEX and WIN are fully executed on the smart contract chain, fair and just.

Summary

The dual-token economic model of the Phoenix Network is an important component of its decentralized derivatives trading platform. The interaction and influence of the two tokens, PEX and WIN, will jointly promote the development and prosperity of the platform.

PEX, as a governance token, supports the governance and development of the platform, while also serving as a reward mechanism to incentivize users to participate in the construction and development of the platform. WIN, as a contribution value token, is used to reward those who contribute to the growth of protocol users, and it can also function as a burning mechanism to accelerate the release of PEX staking rewards. Through the interaction of PEX and WIN, economic balance within the protocol is achieved, while also enhancing the platform's transparency and fairness, protecting users' interests and rights.

![What is the charm of the Phoenix Network, which completed 625 ETH in IDO fundraising in 15 days and is about to deploy Blast L2?])https://img-cdn.gateio.im/webp-social/moments-b36ccf38ec8f28808bdf277fbd99cc1d.webp(