# 7. TOKEN MODEL AND ECONOMY

The $VABT fungible utility token is an ERC20 Ethereum token that is the native token/ currency within the VABot Ai ecosystem, offering the following use cases.

1. Merchants will utilize tokens to cover the monthly terminal fee, originally set at $500 USD/ However they will receive a 20% discount if they opt to pay with tokens.
2. Advertisers will utilize tokens to promote their products paying on an hourly basis when the terminal is idle.
3. Specific terminals may prompt users to make payments using tokens, and opting for token payment entitles them to discounts as proposed by the merchants.
4. 10% of the revenue generated from advertisers and merchants will be allocated to users through the staking platform in the Token APP.
5. Token holders will receive premium membership benefits at designated restaurants, bars and malls, including exclusive discounts and rewards in the form of coupons.

**Expanded future use case(s) and utility concepts:**

The $VABT community serves as a foundational membership to govern, vote and participate in the VABot Ai ecosystem and each part of the VABot Ai framework, upholding the core pillars of decentralization and creating a healthy token economy.

**Token Economy Flywheel**

As the VABot Ai ecosystem generates more fees, users and merchants this will increase $VAB token emissions, which can then be used to offer incentives to $VAB token holders (voters) to stake more tokens in $VABT liquidity pools.&#x20;

These offer incentives are proportionate to the the voting rights (number of tokens held) by the token holder, so that by holding more $VAB tokens means a voter will gain more incentives.

This protocol incentivises everyone in the VABot Ai token economy to support and particpate in growing the VABot Ai ecosystem, because the more fees, merchants and users that generated, the more token emissions and consequently more incentives are distributed amongst the voters. This mechanism also removes tokens from circulation and thus decreases token supply, causing a deflationary effect. &#x20;

**Other potential future use cases;**

1. *Settlement currency:* Our long term vision is that $VAB tokens users will be able to make in-app purchases and complete POS transactions at VABot Ai interactive terminals using $VABT. This means that $VAB token holders would be able to order items, such as food and make payment in $VABT either using their VABot Ai mobile wallet or a third party digital wallet, where VAB is available. To faciluate this VABot Ai will explore the options for Crypto > FIAT off-ramp and voucher systems so that Merchants may receive payments in FIAT or crypto.
2. *Cashback and web3 loyalty rewards:* End-users making purchases at VABot Ai interactive terminals or through the VABot Ai mobile app may be rewarded with cashback on purchases. This cashback may be distributed to the user in $VAB tokens, FIAT or alternative digital currency subject to the options offered. As a user earns $VABT for making puchases the user may then accumulate $VAB to unlock higher reward tiers, (gamification, status and voting powers), stake $VABT or exchange it. As $VABT is accumulated a user may ultimately use this for future purchases. VABOT will use its *group buying power* to incentivise customer rewards from merchants applicable to $VABT holders, unlocking benefits, perks, airdrops and customised rewards, such as NFTs. Such rewards may be distributed according to VABOT reward and membership tiers, with higher tiers proportionate to the number of $VAB tokens held. Details of rewards for $VABT holders may be announced through VABot Ai socials or via push notifications within the VABot Ai mobile app, also providing marketing opportunities for VABot Ai merchants to make offers to $VABT community. Generally, cashback on purchases made through the VABot Ai super-terminals or mobile app may be funded through merchant affiliate programs, which lends itself to rapid scalability.
3. *Expanded merchant and membership subscriptions: Payments for* VABot Ai hardware and/or software licences can obtain discounted rates according to the number of VAB tokens they hold, additional users may climb the membership tiers to unlock mebership benefits.
4. *Engagement and data:* As a user shares data through a VABot Ai powered terminal, mobile app or end-user application, the user may earn $VABT in return for their engagement. By engaging with VABot Ai appplications and/ or providing feedback and consumer surveys for merchants, users can earn and accumulate $VAB tokens.
5. *Staking program: VABot Ai intends to design an attractive staking and rewards program for* $VABT holders. After public listing, VABOT may also introduce staking liquidity pools.
6. *Governance:* VABot Ai could develop a governance and voting system to enable $VABT holders and community members to vote and participate in the ongoing development of the VABot Ai project. Governance voting such as product features, grant distribution and community events. This commitment is our commitment to building a hybrid approach to decentralization and consensus, which will help to secure our future and preserve stakeholder interests.
7. *Subject to regulatory restrictions:* VABot Ai will explore the possibilities using $VAB tokens to incentivise token holders (voters) to participate in liquidity pools. This is currently under review due to compliance and regulatory concerns, since this may not be possible in certain geo's. &#x20;

**$VAB Token Economics**

For the VABot Ai vision and product delivery VABot Ai is looking to raise $10M, this will cover the costs as detailed in the use of funds section below and will enable VABot Ai to build a robust ecosystem needed to support the dynamic framework and vision for this project.

Accordingly, VABot Ai intends to use funds from its token sale to facilitate the technical development, roadmap and goals outlined in this whitepaper together with development of the token, community and governance processes.&#x20;

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**VAB Token Contracts: Driving the Tokenomic Engine**

The VAB Token Contracts play a pivotal role in managing the lifecycle of VAB tokens, the native currency of the VAB ecosystem. These contracts govern the issuance, transactions, and utility of VAB tokens, ensuring a strong tokenomic structure.

*Key features and functionalities of the VAB Token Contracts include:*

* *Issuance and Distribution:* These contracts manage the initial distribution of VAB tokens, ensuring a fair and transparent process. They facilitate the minting of new tokens, as well as their allocation to various stakeholders, such as investors, team members, and community members.
* *Transaction Facilitation:* The VAB Token Contracts enable seamless and secure transfer of tokens between users within the ecosystem. They implement industry-standard protocols to ensure the integrity and security of each transaction.
* *Staking, Rewards and Liquidity Provision:* To incentivize long-term token holding and participation in the ecosystem, these contracts incorporate staking mechanisms. Staking allows users to earn rewards for locking up their VAB tokens for a specified period.
* *Governance and Voting:* The VAB Token Contracts also support on-chain governance, allowing VAB token holders to participate in decision-making processes. By voting on proposals, token holders can shape the future direction and development of the VABot Ai ecosystem.

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