Token Mechanics
Understand the sophisticated token mechanics that make GRID Token a truly innovative DeFi investment product with sustainable yield generation.
Token Design
Core Properties
Asset-Backed
Each token represents a proportional share of managed assets
Elastic Supply
Token supply adjusts based on deposits and redemptions
Non-Rebasing
Token balance stays constant; value appreciates over time
Fully Redeemable
Always exchangeable for underlying assets at NAV
Token Specifications
| Token Name | GRID Token |
| Symbol | GRID |
| Decimals | 9 (Solana standard) |
| Initial Price | $1.00 USD |
| Token Standard | SPL Token |
| Max Supply | Unlimited (elastic) |
Minting & Burning
Minting Process (Investment)
When users invest in GRID Token:
1
User Deposits Assets
User sends SOL or USDC to the GRID smart contract
2
NAV Calculation
Contract calculates current Net Asset Value per token
NAV = Total AUM / Total Supply
3
Token Minting
New GRID tokens are minted proportional to investment
Tokens = Investment Amount / NAV
4
Capital Deployment
Assets transferred to trading bot for immediate deployment
Burning Process (Redemption)
When users redeem GRID tokens:
1
Burn Request
User initiates redemption by sending GRID tokens to contract
2
Share Calculation
Contract calculates proportional share of assets
Redemption = (Tokens / Total Supply) Γ Total AUM
3
Position Unwinding
Trading bot closes positions to free up capital if needed
4
Asset Transfer
SOL and USDC transferred to user's wallet, tokens burned
Price Dynamics
NAV Calculation
The Net Asset Value (NAV) determines the token price:
Real-Time NAV Formula
NAV updates every block (~400ms) based on real-time asset values
Price Appreciation Model
How Token Price Increases
Month 1
$1.062
+6.2%
Month 2
$1.128
+12.8%
Month 3
$1.197
+19.7%
Factors Affecting Price
Positive Factors π
- β
Trading Fees: Every trade generates fees that increase NAV
- β
Compound Growth: Reinvested yields accelerate appreciation
- β
Market Volatility: Higher volatility = more fee generation
- β
Capital Efficiency: Concentrated liquidity maximizes returns
Limiting Factors π
- Γ
Rebalancing Costs: Transaction fees during position adjustments
- Γ
Low Volatility: Reduced trading activity in stable markets
- Γ
Slippage: Large position changes may incur slippage
- Γ
Network Congestion: High gas fees during peak times
Economic Model
Revenue Sources
GRID Token generates revenue through multiple streams:
Liquidity Provider Fees~85% of revenue
0.01% - 1% fee on every trade that uses our liquidity
Funding Rate Arbitrage~10% of revenue
Profit from funding rate differentials in perpetual markets
Range Trading Profits~5% of revenue
Additional profits from volatility capture within ranges
Cost Structure
| Cost Category | Description | Daily Cost |
|---|---|---|
| Network Fees | Solana transaction costs | ~$5 |
| Infrastructure | RPC nodes, servers, monitoring | ~$20 |
| Oracle Fees | Pyth Network price feeds | ~$2 |
| Priority Fees | MEV protection, fast execution | ~$8 |
| Total Costs | ~$35 |
Profitability Analysis
Daily Economics (at $5M AUM)
Gross Revenue
~$560
All revenue streams
Operating Costs
~$35
All expenses
Net Profit
~$525
93.75% margin
Sustainability Analysis
GRID Token's economic model is designed for long-term sustainability:
Real Yield
Revenue from actual trading activity, not token emissions
Scalable Model
Costs remain fixed while revenue scales with AUM
Risk Mitigation
Delta neutral strategy protects capital in all markets
Token Utility
Primary Use Cases
- Investment Vehicle: Access to professional-grade grid trading
- Yield Generation: Passive income through automated strategies
- Governance Rights: Vote on protocol parameters (future)
- Fee Discounts: Reduced fees for large holders (planned)
Future Enhancements
- Staking Rewards: Additional yield for long-term holders
- Liquidity Mining: Incentives for GRID/USDC liquidity providers
- Cross-Chain Bridges: Access from multiple blockchains
- Institutional Features: Separate share classes for institutions