# Tokenomics & LP Lock

At the core of every launch on DeFive is a structured tokenomics and liquidity strategy — one that supports real fundraising, protects buyers, and strengthens the entire ecosystem through $FIVE utility.

***

#### 🎯 1. Token Allocation for Launch Rounds

Projects launching via DeFive commit a **predefined portion of their total token supply** to the Launchpad.

* Typically between **5–15%** of the total supply is allocated for the launch.
* This allocation is split across the **Genesis** and **Momentum** rounds.
* The exact percentage and distribution are **customized based on the project’s tokenomics**, but **always transparently published** ahead of launch.

To ensure quality and accountability:

* If a project team’s personal token allocation **exceeds 10%**, then **KYC verification is mandatory**.
* This helps filter unserious teams and reduce risk of bad actors.

***

#### 🔁 2. Real Fundraising, Not Just Token Swapping

Unlike many launch models that rely on speculative token-to-token sales, DeFive ensures projects **raise stable assets** that can support real-world development.

* Genesis Round: Participation is in **USDC** only — providing clean, stable liquidity.
* Momentum Round: May support **USDC, $S**, or **staked $S** (project-dependent).
* These assets flow to the project as real capital, allowing serious teams to fund development, liquidity, and operations.

This model ensures that launcpad is **not a pump-and-dump machine** — but a real bridge to growth for projects building on Sonic.

***

#### 🔥 3. Buyback and Burn Mechanism

Here’s where DeFive turns fundraising into **ecosystem value**.

* A portion of the **raised funds** are allocated to the platform.
* These funds are:
  * **Converted into $FIVE via open-market buybacks**
  * **Burned permanently**, removing supply and creating deflationary pressure.
  * Optionally, a portion can be used to **bootstrap staking rewards** for the launched token (i.e., creating a launch pool or farming opportunity).

This creates a **circular value system** where every launch benefits not just the project, but the long-term health of $FIVE and veFIVE holders.

***

#### 🔐 4. Liquidity Pool Locking: Rug-Proof by Default

One of the most common community fears is:\
“What if they launch, dump tokens, and vanish?”

DeFive has a built-in safeguard:

* **At least 10% of the raised funds** are required to be used for **creating a liquidity pool** for the token.
* This liquidity is:
  * **Locked via smart contract** for a **minimum of 6 months**.
  * Managed transparently, with clear details visible to the public.

This ensures:

* The token has a **healthy, tradeable market** post-launch.
* The team cannot **pull liquidity and run**.
* Buyers are **protected** from typical post-launch volatility and scams.

***

#### 🧠 Summary: Built to Strengthen, Not Drain

Structures aren’t an afterthought — they’re the **engine of sustainability**:

| Component        | Purpose                      | Who Benefits            |
| ---------------- | ---------------------------- | ----------------------- |
| Token Allocation | Controlled supply for launch | Users (fair access)     |
| USDC Fundraising | Real development funds       | Projects                |
| Buyback & Burn   | $FIVE deflation              | DeFive community        |
| LP Locking       | Rug protection               | Users + Ecosystem trust |


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