Token Functions

The PHY token economy model is built around fairness, incentivization, and sustainability. It is designed to support the long-term health of the decentralized network, focusing on device contributions, community governance, and ecosystem participation. As the core circulating asset of the PhyChain network, PHY tokens serve as both a medium of value and an incentive mechanism within the ecosystem.

5.1 Token Functions

The functionality of PHY tokens is designed to cover diverse application scenarios, encompassing rewards, governance, and payments:

Rewards and Revenue Distribution: PHY tokens function as the incentive mechanism of the network. Using smart contracts, rewards are distributed based on device computing contributions and task completions. Users who connect idle computing resources to the PhyChain network can earn PHY tokens in real-time. The reward amount is proportional to the device's computational performance, task complexity, and runtime.

Decentralized Governance: PHY token holders can participate in network governance by voting on key ecosystem development directions, including the introduction of new features and adjustments to community incentive policies. This decentralized governance model ensures broad community participation while granting users a voice in the platform’s development, embodying a community-driven network operation.

Ecosystem Transactions and Circulation: PHY tokens can be used to purchase PhyChain hardware devices, network services, or as access passes for decentralized applications (DApps), enhancing the token’s circulation value. Through PHY tokens, users can benefit from the network while achieving multi-scenario applications within the broader ecosystem.

5.2 Token Distribution and Issuance

PhyChain adopts a scientific token distribution and issuance model to ensure fairness and incentivization while fostering rapid ecosystem growth and long-term stability.

Total Supply and Allocation Plan: The total supply of PHY tokens is fixed at 1 billion tokens, with the following allocation structure:

Mining and Ecosystem Rewards (50%): Incentivizing device nodes that contribute computing resources and users who participate in network construction.

Team and Advisors (15%): Allocated to core development teams and technical advisors for ecosystem construction, with a two-year lock-up period and gradual unlocking.

Marketing and Community Building (15%): Used for marketing activities, community incentives, and brand promotion to support ecosystem growth.

Institutional Investors (10%): Reserved for early-stage financing and strategic partner introductions, with a one-year lock-up period.

Reserve Fund (10%): Reserved for ecosystem expansion and future strategic development, ensuring the platform’s sustainable operations.

Mining and Staking Mechanisms: PhyChain encourages long-term participation in the network through mining and staking mechanisms:

Mining Mechanism: Users contribute computing resources through connected smart hardware devices. Each completed task earns PHY rewards, calculated based on task complexity and device performance.

Staking Mechanism: Users can stake PHY tokens within the network to earn additional rewards while enhancing the network's security and stability. The staking period is one year, with rewards unlocked gradually, offering multiple returns to users.

5.3 Practical Applications of PHY Tokens

The design of PHY tokens combines value storage and practical functionality, covering scenarios such as hardware purchases, ecosystem rewards, community governance, and consumer products.

Hardware Purchases and Payments: Users can use PHY tokens to purchase core hardware devices such as Web3 smartphones, smart wearables, power banks, and smart routers in PhyChain’s physical stores or online marketplaces. These devices enable users to quickly connect to the decentralized computing network and earn computing contribution rewards. Additionally, PHY tokens can be used to purchase value-added network services such as premium computing resources and edge computing services, meeting the diverse needs of users.

Consumer Product Purchases: PhyChain’s ecosystem offers a wide range of consumer products, including mugs, umbrellas, backpacks, pens, and other daily essentials, through physical stores and online marketplaces. Users can directly purchase these items with PHY tokens, bridging digital assets with real-world consumption scenarios.

Reward Distribution and Ecosystem Governance: PhyChain uses smart contracts to ensure fair and transparent reward distribution. Users automatically earn PHY rewards based on their computing contributions. Additionally, PHY token holders can participate in community governance by voting on major ecosystem proposals, such as hardware feature designs, reward distribution mechanism optimizations, and community activity planning. By granting governance rights, PhyChain transitions users from participants to ecosystem partners.

Ecosystem Diversity Applications: PHY tokens can also be utilized in decentralized finance (DeFi) scenarios, including staking, liquidity provision, and token lending, providing users with more opportunities for investment and value growth. Furthermore, PHY tokens will be integrated into metaverse, NFT trading, and other Web3 application scenarios, enriching users’ digital economy experiences.

By supporting multi-layered applications ranging from hardware and consumer product purchases to reward distribution and community governance, PHY tokens not only serve as the core asset of the PhyChain network but also evolve into a bridge between the real-world and digital economies, creating more value and convenience for users.