> For the complete documentation index, see [llms.txt](https://smily.gitbook.io/smily-docs/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://smily.gitbook.io/smily-docs/token-economy.md).
# Token economy
## Supply and distribution
**Supply.** 1,000,000,000 (one billion) $SMILY, fixed. No minting, no inflation. This is consistent with a model where the game redistributes and burns but never creates tokens.
Each removed allocation still works without a pre-mine.
* **Liquidity** is bootstrapped by the launch itself. The buys that occur at launch create and feed the pool. Liquidity comes from purchases. The liquidity position is locked or burned.
* **Community rewards** are structural rather than a handout. The community earns by playing (97% of every pot) and by holding (the 2% burn benefits every holder through deflation). Any future incentives or airdrops are funded from accumulated operating revenue (the 1%), never from a pre-mine.
* **Team and operations** are funded by the recurring 1% operating fee. The team can acquire $SMILY on the open market like anyone else, which is the fairest possible posture.
## The flywheel
```mermaid
graph LR
A[USDC enters and swaps to $SMILY] -->|buy pressure| B[$SMILY demand rises]
B --> C[Players stake $SMILY in rooms]
C --> D[Pots redistribute to winners]
C --> E[2% of every pot burned]
E -->|fixed supply shrinks| F[$SMILY becomes scarcer]
F --> G[Price and attention rise]
G --> H[More players join]
H --> A
```
Fixed one-billion supply, deflation of 2% per pot, continuous buy pressure from entries, redistribution to winners, and hold demand from holder utility. Supply only ever decreases. The more the game is played, the scarcer the token gets.
## Why value accrues
Three forces push on a fixed supply at the same time.
**Buy pressure.** Entries are denominated in $SMILY. To sit at a table, players acquire the token, and that demand is continuous and tied directly to how much the game is played.
**Redistribution.** Pots flow to the best forecasters, which keeps the token circulating among active, engaged players rather than sitting idle.
**Deflation.** Two percent of every pot is burned, permanently. There is no faucet to offset it, because there is no minting. Every room played makes the remaining supply smaller.
## Holder utility
Holding $SMILY unlocks perks that create hold demand without inflation.
* Reduced operating fee by hold tier (for example, the 1% reduced toward 0.5%).
* Access to exclusive rooms and Home Games.
* Season multipliers and ranked benefits.
* Cosmetics and profile customization.
* Governance, later in the roadmap.
Perks can be gated by holding thresholds or by staking, so holding the token is rewarded inside the product, not just on a chart.
## Launch mechanics
* Fair launch on Base, with liquidity on a Base DEX.
* The liquidity position is locked.
* No private sale, consistent with the community ethos.
* Smart contracts verified and audited before launch.
* Any early-user airdrop is funded from accumulated operating revenue, not from a pre-mine.
## Funding model
Operations, the team, and marketing are funded by the recurring 1% operating fee, which scales with volume. The pre-launch bootstrap, which covers development, the smart-contract audit, infrastructure, and launch marketing, is self-funded by the founders until the 1% revenue takes over. There is no treasury buffer by design. The 100% community distribution is the deliberate posture, and the recurring 1% is what makes it sustainable without a pre-mine.
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