# Mechanics

**Escrow Fees Distribution ( 0.1-x% scaling based on deposit)**

33% of escrow fees will go to Altverse treasury (treasury is ERC 4626 Vault Tokenized = instead of having passive liquidity we have it liquid(removable) in other pool earning more interests). (Treasury holds, Stablecoins)

67% of escrow Fee will be distributed between stakers of the ALTV token in 2 different staking pools pALTV Stablecoin, pALTV will have the highest APR.

Of the 67%, 33% will be distributed as pALTV, or Stablecoin. The remaining 67% as esALTV.

**How we control ALTV inflation and price stability.** Staked ALTV holders are entitled to receive Escrowed ALTV (esALTV) as a reward and this esALTV can be used in two ways:

1. Staked for rewards similar to normal ALTV
2. Vested to become normal ALTV tokens over a period of 12 months **Staked** esALTV can be staked immediately, earning the holder exactly the same rewards as normal staked ALTV – more esALTV, multiplier points and pALTV/Stablecoin rewards from platform fees. **Vested** Each Vested esALTV can be vested to become normal ALTV. To vest your esALTV, you are required to lock the average ALTV that earned you that esALTV in a vault. While in this vault the ALTV cannot be sold but does still accrue rewards. Vesting esALTV then unlocks linearly and takes one year to unlock fully, with ALTV or fractions of ALTV being distributed to users every second. (similarly to rebasing) The locked ALTV in the vault can always be withdrawn but this will stop any further vesting of esALTV and will restart the linear release speed in case vesting process is initiated again.

**Tokenomics | Escrowed ALTV**

Current Distribution rate of esALTV \*

* X amount of esALTV tokens per month to ALTV stakers
* X-y esALTV tokens per month to ALTV stakers (descaling with time as ALTV price increases)

**Multipliers**

The second reward ALTV holders are entitled to is Multiplier points. Multiplier points are a way to reward long term holders without inflation. Staked ALTV receives multiplier points every second at a fixed rate of X% APR.

These multiplier points can then be staked, allowing the holder to accrue protocol fee rewards. Each multiplier point is entitled to the same amount of /pALTV/Stablecoin as a normal ALTV token. Unstaking ALTV or esALTV will mean a proportional amount of multiplier points are burnt. _For example:_ _if 1000 ALTV is staked and 500 Multiplier Points have been earned so far, then unstaking 300 ALTV would burn 150 (0.3 \* 500) Multiplier Points”._ This mechanism incentivises holders to stake their ALTV for long periods of time as the only way to acquire multiplier point is through time. Furthermore, the specifics of these benefits will be released at a later time at future rewards being distributed based on these points as they are a good proxy for a power/long-term user of the protocol.

**Demand**

Next we will look at demand for the ALTV token. We will analyse the return on investment and the project mechanics to better understand why this token will be in high demand. The staking of the ALTV token entitles users to earn a 67% share of the protocol revenue, distributed in pALTV/Stablecoin. It could be represented as 27% APR (18 esALTV APR, 7pToken 19esALTV, 4 Stable 22esALTV ), however, this esALTV APR should be discounted as it is not immediately liquid. This return on investment represents a large opportunity for long term holders to generate additional returns and as such we expect over 80% of the circulating supply to be staked.

**Price Floor Fund (floor price)** The next source of demand for the ALTV comes from the price floor fund. 15% of total initial supply of ALTV have been allocated to be managed by the price floor fund and wont be initially minted. The idea is that the price floor fund will help ensure liquidity in the ALTV pools and provide reliable rewards for staked ALTV, this is because it is protocol owned liquidity. As the price floor fund grows, due to accumulation of fees from the liquidity provided in our treasury (x%), it can be used to buyback and burn ALTV if:

Floor Price/Total supply < ALTV market price.

This will lead to a minimum price for ALTV assuming floor price reached $1m , and circulating supply is 5m, floor price of ALTV is $0.2

