> For the complete documentation index, see [llms.txt](https://aurabnb.gitbook.io/aurah2o/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://aurabnb.gitbook.io/aurah2o/tokenomics.md).

# Tokenomics

How our token model works

## 2.6: Tokenomics

### Tokenomics and Staking

#### AuraH2O Token Economics

**Total Supply:** 100,000,000 AuraH2O tokens (fixed supply, no inflation, deflationary metrics)\
\
The business will seek to acquire up to 40 percent of all tokens locked between operations, marketing, plant acquisitions, and business expansion costs to bolster its own treasury and operations over the first five years.

## Trust Distribution Model

**Trust Holders (40% of net profits):**

* Distributed proportionally to token holders based on holdings
* Minimum holding period: 30 days to qualify
* Payment options: Stablecoin, additional tokens, or facility credits
* Automatic distribution via smart contract

**Business Operations (20% of net profits)**

* Staff compensation and benefits
* Equipment upgrades and expansion
* Quality control and compliance

**New Plant Acquisition (15% of net profits)**

* Direct investments into land, equipment, and new bottling plants

**Founder (10% of net profits)**

* Incentivized long term operational and executional incentives

**New investment aquisitions (5% of net profits)**

* New investments to bolster the trusts longevity and security in either LP positions or tokens

**Marketing (3% of net profits)**

* Marketing funds to expand reach and partnerships

**Company buy back and stake (1% of net profits)**

* Tokens allocated to the various departments to be staked to fortify and accelerate expansion and growth

**Buy back and burn (1% of net profits)**

* Tokens to be purchased off the market to be  burned creation a deflationary supply loop

## **LP Distribution Model**

**Operational Allocation (70% of LP Funding):**

* Facility construction and maintenance
* Staff compensation and benefits
* Equipment upgrades and expansion
* Quality control and compliance

**Growth Fund (10% of LP Funding):**

* Investments in community voted tokens
* LP Strategies
* Interesting Ecosystem partners
* LP Pairings for the token

**Community LP Sharing (10% of LP Funding):**

* Educational initiatives and water literacy
* Environmental restoration projects
* Local economic development support
* Emergency relief and disaster response

**Founder Compensation (10% of LP Funding):**

* Leadership and bootstrap compensation
* Volume-based incentives aligned with community outcomes
* Reduction to 5% upon full DAO transition and 5% allocated to investment fund

#### Staking Mechanisms

**Governance Staking:**

* **Lock Period:** 1, 3, 6, or 12 months
* **Voting Multiplier:** 1.2x, 1.5x, 1.7x or 2x voting power respectively
* **Benefits:** Priority proposal privileges and enhanced profit sharing multiplier in later governance evolutions

#### Token Utility Expansion

**Phase 1: Basic Utility (Months 1-12)**

* Governance voting and profit sharing
* Facility tour and event access
* Community merchandise and exclusive content

**Phase 2: Enhanced Utility (Months 12-24)**

* Sponsor partnership negotiations and approval
* Product development input and testing access
* Regional facility management opportunities

**Phase 3: Ecosystem Utility (24+ Months)**

* Cross-platform partnerships and integrations
* Franchise ownership and operation rights
* Policy advocacy coordination and funding
* Global expansion governance and planning

#### Economic Sustainability Model

**Revenue Growth Projections (excluding investment returns):**

* **Year 1:** $300,000 (conservative sponsor adoption)
* Year 2: $1,000,000 (2+ locations, multiple sponsors)
* **Year 3:** $2,000,000 (multiple facilities and premium sponsors)
* **Year 5:** $20,000,000 (regional expansion and ecosystem development)

**Token Value Drivers:**

* **Profit Sharing:** Direct correlation between facility performance and token returns
* **Governance Premium:** Control over growing ecosystem increases token demand
* **Utility Expansion:** New use cases and partnerships create additional value
* **Scarcity:** Fixed supply with growing demand from expanding operations
* Investments from decentralized investment collaborative via LP, token appreciation, or liquidity provision models.

**Risk Management:**

* **Revenue Diversification:** Multiple sponsor tiers and geographies
* **Insurance Coverage:** Comprehensive facility and operational protection