> For the complete documentation index, see [llms.txt](https://docs.ufg.finance/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://docs.ufg.finance/protocol-overview/tokenomics.md).

# Tokenomics

$UFG has a fixed supply, no emissions, and one sink. Value accrues only as ETH backing per token.

## Supply

| Item                        | Value                                                                                                                                                                                                             |
| --------------------------- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |
| Total supply at launch      | 1,000,000,000 $UFG                                                                                                                                                                                                |
| Minting after launch        | None. The contract has no mint function.                                                                                                                                                                          |
| Team or pre-mine allocation | None. Pons minted the full supply to the launch curve.                                                                                                                                                            |
| Founder holding             | 111,440,207 $UFG (11.14%), bought in the opening curve buy for 0.215 ETH. Held in the token lock until 2026-11-02 at the earliest at which point it will be directed to a multi-sig under the protocol's control. |
| Sink                        | Redemption burns tokens to the dead address. Burned tokens leave the effective supply forever.                                                                                                                    |

Effective supply is total supply minus the dead-address balance. The treasury uses effective supply for every backing and payout calculation.

## Launch and market

Pons V2 launched $UFG on 2026-08-30 with these fixed terms:

* Quote asset: native ETH.
* Graduation threshold: 4.2 ETH on the curve.
* Pons buyback: disabled.
* Creator tax: 1%.

The curve graduated on 2026-08-31. Graduation moved 419.5M $UFG and the curve's ETH into a full-range Uniswap v4 position. That position is locked permanently. Another 81.6M $UFG sits at the Pons permanent locker contract. All other tokens are in the hands of holders.

## Trading fees

Every trade in the $UFG market pays 2% in total.

| Fee               | Rate | Goes to                                                       |
| ----------------- | ---- | ------------------------------------------------------------- |
| Pons standard fee | 1%   | Split between Pons and the creator under the Pons fee policy. |
| Creator tax       | 1%   | The creator in full.                                          |

The treasury is the creator. Its income is the whole creator tax plus the creator's share of the standard fee. Fees accrue in the Pons hook, a sweep moves them to the Pons fee escrow, and anyone can then claim them into the treasury with `collect()`. The pool itself charges no Uniswap core fee.

## Redemption

Any holder can burn $UFG for ETH at any time.

* Payout: 98% of the burned tokens' pro-rata share of the treasury's ETH.
* Exit fee: 2%, retained by the treasury.
* Effect: backing per remaining token rises with every redemption. Measured in ETH, it never falls.

Backing per token equals the treasury's ETH divided by the effective supply.

## What $UFG does not do

* No staking and no rewards.
* No distributions to holders.
* No buybacks.
* No lending, trading, or investing by the treasury.
* No governance. No parameter can change.

## Future fee routing

The family design routes a fixed share of each later product's fees to this treasury. No such product is live. Whether one launches, and on what terms, is a separate future decision.