☯︎ || Dual-Token Model

Sustainable emissions

The main problem that new DEXes face is that they’re considered a risky investment. In fact, liquidity providers usually pretend competitive yields, but considering that real yields come from trading volume, and trading volume doesn’t take off without enough liquidity, new DEXes can only provide competitive yields by rewarding liquidity providers with their dex-native token. This causes extreme inflation of the token which slowly but surely gradually destroys the token first and the whole protocol then.

Citadel aims to fix this issue by implementing a dual-token model, which comes from GMX’s successful escrowed-model, aimed at ensuring the long-term success of the protocol while allowing supporters to benefit from real yields through protocol fees.

Our protocol is powered by 2 tokens, FORT and esFORT:

  • FORT is Citadel's native token. Together with $esFORT, it can be earned as yield rewards on the various yield farms available on the protocol.

  • esFORT represents a non-transferable escrowed token, corresponding to staked $FORT. It plays a significant role in creating a sustainable tokenomics strategy, in fact, farming rewards will be distributed in esFORT/FORT in an 80%/20% ratio. In other words, most of our emissions will require a vesting period to become liquid, ensuring that LPs are aligned with the long-term objectives of the protocol thus containing any short-term selling pressure.

But illiquid doesn’t mean unprofitable: esFORT allows its holders to earn dividends directly from the protocol's earnings.

Conclusions

By leveraging these features, we can provide fairly competitive yields from the very beginning without impacting protocol sustainability, and if you couple that with the deflationary mechanisms applied on FORT, this will create the perfect blend to an efficient and sustainable growth model.

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