> ## Documentation Index
> Fetch the complete documentation index at: https://vektorcompute-77d08130.mintlify.site/llms.txt
> Use this file to discover all available pages before exploring further.

# Tokenomics & The Flywheel

> The economic engine driving sustainable yield and network growth.

The `$VKTR` token is the cryptographic lifeblood of the Vektor Protocol. It functions as a utility, governance, and value-accrual mechanism, designed specifically to capture the real-world economic value of decentralized AI inference.

### The Vektor Economic Flywheel

\[Image of circular economic flywheel diagram showing Spend, Sink, and Reward mechanics]

Unlike legacy protocols that dilute their token supply to artificially inflate APY, Vektor’s yield is driven by a closed-loop economic flywheel based on actual network usage.

1. **The Spend (Demand):** AI developers and enterprise clients pay for global compute inference using USDC or `$VKTR`.
2. **The Sink (Buy Pressure):** The Vektor Protocol takes 100% of the USDC revenue generated by the mesh network and uses it to systematically market-buy `$VKTR` from decentralized exchanges.
3. **The Reward (Yield):** The purchased `$VKTR` is distributed directly back into the ecosystem:
   * **70%** is distributed to the Node Operators (for provisioning the H100 hardware).
   * **30%** is distributed to Stakers (for securing the routing layer).

This creates a perpetual cycle: as AI demand increases, protocol revenue increases, driving continuous buy-pressure and sustainable yield for `$VKTR` holders.

### Velocity-Gated Autocompounding (VGA)

To protect the network from mercenary capital and sudden liquidity shocks, Vektor implements **Velocity-Gated Autocompounding (VGA)**.

Stakers can choose their lock-up periods, which directly gates the velocity of their token emissions. Longer lock-ups receive a higher multiplier of the real-world yield:

* **Liquid Staking:** 1.0x Yield Multiplier (No lock-up)
* **30-Day Lock:** 1.5x Yield Multiplier
* **90-Day Lock:** 3.0x Yield Multiplier

By heavily incentivizing long-term alignment, the circulating supply of `$VKTR` is effectively shrunk, compounding the deflationary effects of the protocol's market buys.

### Genesis Allocation

At Mainnet launch, the total supply of `$VKTR` is hard-capped at **1,000,000,000 (1 Billion) tokens**, allocated as follows:

| Allocation                         | Percentage | Vesting Schedule                                         |
| :--------------------------------- | :--------- | :------------------------------------------------------- |
| **Node Emissions & Staking Yield** | 45%        | Emitted dynamically over 10 years based on network load. |
| **Treasury & Ecosystem Fund**      | 20%        | 6-month cliff, linear vesting over 36 months.            |
| **Core Contributors**              | 15%        | 12-month cliff, linear vesting over 48 months.           |
| **Early Backers & Private Sale**   | 15%        | 12-month cliff, linear vesting over 24 months.           |
| **Public Liquidity & Airdrop**     | 5%         | 100% unlocked at Token Generation Event (TGE).           |