# PHASE Token

> The native utility token of the Phase network

PHASE is the native utility token of the Phase network.

- [Validator Economics](validator-economics.md) — ECONOMICS: A validator's income has three designed components: block rewards from the emission schedule, a share of transaction fees, and income from the proxy economy, which is designed to flow to validators as the proxy marketplace matures.

**Network fees.** Transactions on Phase are denominated in PHASE, tying demand for the token directly to network usage.

**Validator rewards.** Validators earn PHASE through committee participation, released only upon finality. Rewards are calibrated to make sustained mobile participation economically worthwhile — and validators whose phones carry proxy traffic also receive a share of the proxy revenue, paid in PHASE bought on the open market ([Proxy revenue becomes PHASE demand](proxy-buyback.md)).

**Proxy-driven buybacks.** The proxy economy feeds the token directly: 100% of proxy revenue is committed to open-market PHASE purchases ([Proxy revenue becomes PHASE demand](proxy-buyback.md)), distributed daily to serving devices pro rata to the revenue they earned. Usage of the network's second product is, by construction, demand for its token.

**Not a staking bond.** Validators do not lock up PHASE to participate, and there is no minimum holding requirement to register. This is a deliberate design choice: requiring large token deposits would reproduce the capital-concentration problem Phase is built to avoid.

**Supply and allocation.** Total supply is fixed at 100 billion PHASE. Half of it, 50 billion, is the validator reward budget, paid at a flat 158.55 PHASE per block until it is exhausted — the cap is enforced by the genesis rewards contract; changing it takes a multisig upgrade. A quarter, 25 billion, belongs to the core team: locked for six months after the token generation event, then released in nine equal quarterly tranches through month 30. The remaining quarter, 25 billion, is the Foundation and treasury allocation: 2% of it is liquid at the token generation event as operating float and the rest vests linearly over 36 months. There is no investor allocation and no staking. Circulating supply therefore starts at 0.5% of the total.

## Tokenomics

> **Status.** This section is the canonical description of PHASE token economics. Total supply, the allocation split, the emission schedule, and vesting terms are fixed as stated below. A small number of secondary operating parameters (such as the mobile-cost-floor reference constant) are designed to be set through governance; no governance process is deployed, and the shipped node carries no value for the mobile cost floor (Remark [17.1](governance.md)). This section is not a token sale document, an offer to sell tokens, or a valuation forecast.

PHASE is the native utility token of the Phase network, serving three functions:

1. **Fee denomination.** Transaction fees are denominated and paid in PHASE through the standard execution-layer fee flow ([Execution Layer](execution-layer.md)), and are the intended input to the fee-offset emission mechanism of [Supply and Emission](phase-token.md), which is not yet active.
2. **Validator rewards.** Block rewards are paid in PHASE, released only under the finality gate of [Finality-Gated Release](reward-mechanism.md). In the current configuration they are a validator's only protocol income: fees are burnt rather than shared ([Fees and Burns](validator-economics.md)).
3. **Governance.** PHASE holders are intended to vote on protocol parameters via timelocked proposals; no voting or timelock contract is deployed, and parameters are changed today by a client release for the consensus constants and by the upgrade multisig for those held in the system contracts ([Governance](governance.md)).

#### Zero-cost registration and the non-PoS claim

Validator registration requires no minimum PHASE holdings. This is the design intent: a meaningful token-ownership requirement would reintroduce a capital gate and contradict the non-PoS objective. Free registration is intended not to create a free-entry security problem, because access to the eligible registry is to be controlled by device attestation (Assumption [3.3](system-model.md)), probation with minimum observation count $N_{\min}$, reputation scoring, and the $M_t$ soft cap. Of those four gates, attestation is planned work: today entry is gated only by proof-of-possession and probation, so nothing yet binds a registered identity to a distinct physical device (Remark [3.2](system-model.md)); what keeps free identities from a voting quorum is the anchor bound of [Committee Selection](committee-selection.md), not a price or an attestation. The economic exposure that deters misbehavior is the validator's accumulated earning position — the discounted future income stream — not a registration deposit.

## Supply and Emission

Total supply is fixed at **100,000,000,000 PHASE**; no issuance exists outside the allocation of Table [5](phase-token.md). Half of the supply — **50,000,000,000 PHASE (50%)** — is committed to validator rewards and is emitted on a **linear per-block schedule over ten years**: at the nominal 1 s accounting unit of [System and Threat Model](system-model.md) this is

$$
R_{\mathrm{block}} \;=\; \frac{5\times10^{10}}{10\cdot 365\cdot 86{,}400} \;\approx\; 158.55\ \text{PHASE per block}
\quad(\approx 5\ \text{billion PHASE per year}).
$$

The schedule is laid out for ten years on the assumption of one block per second; the realized block time may differ from that assumption. The per-block reward and the total budget are the fixed quantities, so a faster or slower chain reaches the end of the budget earlier or later in calendar time while the per-block amount stays the same. Fixing the reward budget as a supply share bounds dilution ex ante and makes the reward pool a governance-visible constant.

A linear schedule was selected over frontloaded and adoption-coupled alternatives for three reasons: it is cohort-fair per unit of time (a validator joining in year seven faces the same per-block reward as one joining at genesis); it is maximally legible; and it still concentrates per-validator income early in the network's life without any explicit frontloading, because the same budget is divided among the small early pool $M_t$. Emission ends at a fixed height rather than on a running account of what has been minted: the shipped schedule pays 158.55 PHASE at heights $1$ through $315{,}357{,}931$ — the largest number of whole payments the fifty-billion budget admits, $2{,}069$ short of the $10\cdot 365\cdot 86{,}400$ blocks the per-block rate was derived from, because the shipped constant is exactly $158.55$ rather than the $158.5489\ldots$ the division gives — and nothing from height $315{,}357{,}932$ on. That cutoff falls in year ten at the nominal 1 s accounting unit of [System and Threat Model](system-model.md) and sooner in calendar time at a faster realized cadence; from it on, validator income consists of transaction fees — once the fee offset below routes them to validators; the current configuration burns them in full — and the proxy economy ([AI Proxy](ai-proxy.md)).

**Fee-offset emission.** Emission is designed to be *net of fees*. In each interval, collected transaction fees fund the scheduled validator payout first; only the shortfall between the fee flow and the scheduled rate is minted from the reward budget, and fee revenue *above* the scheduled rate is burnt. Three consequences follow. First, the scheduled rate is a ceiling on gross minting: as usage grows, net emission falls, and at sufficiently high usage the system turns deflationary. Second, validator income is smoothed: validators receive the scheduled rate whether it is financed by fees or by minting. Third, budget tokens left unminted by fee offset are not destroyed but are meant to remain available and extend the effective reward tail past the schedule's last paying height; the shipped schedule does not implement that carry-forward — `rewardAt` is a pure function of height, paying a flat 158.55 PHASE below the end height and zero from it on — so the tail extension arrives only with the fee offset itself. The offset mechanism's accounting boundaries belong to the governance design of [Governance](governance.md); the mechanism is not implemented, so no such boundary exists today, in the node or in the genesis rewards contract (Remark [17.1](governance.md)).

## Allocation and Vesting


| Category | Share | Tokens | TGE unlock | Cliff | Release |
|---|---|---|---|---|---|
| Validator rewards | 50% | 50.0B | — | — | Linear per-block emission, ten years at the nominal 1 s unit |
| Core team | 25% | 25.0B | 0% | 6 months | Nine equal quarterly tranches, months 6–30 |
| Foundation & treasury | 25% | 25.0B | 2% | none | Linear, 36 months |
| **Total** | **100%** | **100.0B** | | | |

Only the Foundation's operating float is liquid at TGE: 2% of its bucket (500,000,000 PHASE, 0.5% of total supply), which pays the network's first governance and settlement transactions. Everything else vests. The core team allocation is locked for six months and then released in nine equal quarterly tranches — the first six months after TGE, the last thirty months after it — so insiders are fully aligned with the network's first two and a half years. The remaining 98% of the Foundation bucket vests linearly over 36 months from TGE with no cliff, funding ecosystem programs, the bootstrap infrastructure of [Networking](networking.md), and grants. Circulating supply therefore starts at 0.5% of total and grows through per-block emission and vesting.

Two principles are fixed permanently:

- **No validator staking requirement — ever.** Registration requires no minimum PHASE holdings, and no future allocation or governance decision may introduce a bond, lockup, or holding requirement for validation. This is a standing design commitment, not a launch parameter.
- **Community majority.** Half of the total supply is committed to validator rewards alone; together with Foundation-funded ecosystem programs, the majority of supply flows to network participants rather than to the team.

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> This document is provided for informational purposes only. It does not constitute an offer or solicitation to sell or purchase any security, financial instrument, or investment product in any jurisdiction. The PHASE token, if and when issued, will be issued only pursuant to separate offering documentation and applicable regulatory requirements. Participation in the Phase network involves significant risk, including the risk of total loss.