5.2 Total Token Supply, Deflationary Mechanisms, and Incentive Strategies

In RAC’s tokenomics framework, a well-balanced design of inflation and deflation mechanisms is essential for maintaining long-term token value and sustaining ecosystem incentives. RAC adopts a hybrid model that combines fixed supply, continuous deflation, and multi-layered incentive systems. Through a structured issuance plan, dynamic buyback-and-burn strategy, and sustainable reward design, the platform ensures a positive feedback loop for ecosystem growth and decentralized governance.

Fixed Token Supply

The total supply of RAC Tokens is capped at 1 billion (1,000,000,000 RAC), with no future issuance. The initial distribution is as follows:

• 50%: Ecosystem Incentive Pool (liquidity mining, staking rewards, task incentives)

• 15%: Team & Early Contributors (4-year linear vesting)

• 15%: Strategic Partnerships & Community Growth

• 10%: Initial Liquidity and CEX Listing Reserve

• 10%: Foundation Reserve & Emergency Fund

This allocation balances fairness, long-term sustainability, and governance decentralization.

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Deflationary Design

To enhance token scarcity and long-term value, RAC employs a “transaction-driven burn mechanism”, where a portion of platform revenue is used to buy back and burn RAC tokens from the secondary market.

Base Burn Model:

RACburn=RACtotal_fees×20%RAC_{burn} = RAC_{total\_fees} \times 20\%

• $RAC_{total_fees}$ is the total fee income over a set period (e.g., quarterly)

• The burn rate (20%) can be adjusted via governance

Compound Deflation Model (Exponential Burn):

RACburn_n=RACbase_burn×(1+γ)nRAC_{burn\_n} = RAC_{base\_burn} \times (1 + \gamma)^n

• $n$: Burn cycle number

• $\gamma$: Burn growth factor (e.g., 5%)

• $RAC_{base_burn}$: Base burn amount at the first cycle

This creates a flywheel effect where platform growth leads to increased deflation, reinforcing token scarcity and value appreciation.

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Incentive Mechanisms

RAC deploys a multi-faceted incentive structure to encourage active user participation:

1. Staking Rewards Users stake RAC tokens to network nodes or governance pools and earn rewards proportionate to their stake:

Rewardi=StakeiStaketotal×PoolrewardReward_i = \frac{Stake_i}{Stake_{total}} \times Pool_{reward}

1. Liquidity Mining To boost market depth, RAC partners with DEXs to provide LP incentives:

LP_Reward=TVL×APRLP\_Reward = TVL \times APR

Where TVL is the total value locked, and APR is the annualized incentive rate.

1. Ecosystem Task Incentives Users earn rewards for governance participation, asset creation, content contribution, etc., fostering community engagement and retention.

2. Long-Term Holding Incentives Holding RAC Tokens beyond a minimum duration boosts governance voting power and yields additional rewards, reinforcing a “hold-to-earn” model.

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Dynamic Adjustment Mechanism

Through DAO proposals, the platform can dynamically adjust:

• Burn rate (e.g., from 20% to 25%)

• Reward frequency and distribution ratios

• Incentive allocation between staking and liquidity providers

This ensures RAC’s token economy remains adaptive to market conditions while maintaining ecosystem balance and reward efficiency.