# 8. Tokenomics

The $KTQ supply is structured to reinforce an economy where **execution produces value** and **participation requires commitment**.

There is **no variable inflation**.\
There is **no staking emissions schedule**.\
All token flow is tied to **real usage.**

### **8.1 Total Supply**

**Total Supply:** `1,000,000,000 $KTQ` *(fixed)*

No additional minting function exists.

### **8.2 Allocation Model**

| Allocation                         | % of Supply | Mechanism                                  | Purpose                                         |
| ---------------------------------- | ----------- | ------------------------------------------ | ----------------------------------------------- |
| **Machine & Operator Rewards**     | **35%**     | Distributed *only upon verified execution* | Direct linkage to productive output             |
| **Network Expansion Fund**         | **20%**     | Strategic deployment + machine onboarding  | Scales the Assembly footprint                   |
| **Agent Developer Incentive Pool** | **15%**     | Streamed based on Agent usage              | Sustains innovation in behavior modules         |
| **Treasury Reserve**               | **15%**     | Controlled via governance                  | Liquidity, partnerships, grants                 |
| **Core Contributors**              | **10%**     | Allocated at launch                        | Aligns incentives with execution responsibility |
| **Liquidity Provision**            | **5%**      | Deployed into DEX liquidity pools          | Market functionality                            |

This model emphasizes **productive circulation**, not front-loaded insider control.

### **8.3 Circulation Dynamics**

$KTQ flows through the economy as follows:

```
Operators spend KTQ → to request machine labor
Machines receive KTQ → for verified execution
Agent Developers receive KTQ → when their behavior is used
Protocol receives KTQ → through coordination fees
Treasury reallocates KTQ → to expand machine capacity
```

Circulation is **continuous and purpose-driven.**

### **8.4 Supply Discipline & Scarcity Controls**

Supply scarcity increases through:

| Mechanism                            | Effect                                                           |
| ------------------------------------ | ---------------------------------------------------------------- |
| Coordination Fees                    | Recirculates value into expansion resources                      |
| Machine Bond Slashing (Phase II)     | Removes supply from unreliable machines                          |
| Optional Governance-Controlled Burns | Reduces supply during high utilization                           |
| Agent Competition                    | Unused Agents stop earning → incentive refocus on best behaviors |

The token becomes **more scarce as machines improve** — not as time passes.

### **8.5 Treasury Governance and Deployment**

Treasury funds:

* Machine onboarding
* Developer bounties
* Operator grants
* Demonstration environments
* Infrastructure growth

This ensures long-term **network expansion without emissions.**

### **8.6 Economic Integrity**

There is **no reward without execution**, which prevents:

* Value leakage to passive holders
* Inflationary dilution
* Reward farming without contribution

$KTQ is a **productive asset**, not a speculative placeholder.
