5. Tokenomics: The Non-Inflationary Model

Most blockchains rely on "Block Rewards" (Inflation) to pay validators. This devalues the token over time. Frogment introduces a Real-Yield Gas Model.

5.1 The Problem with Inflation

• Traditional Model: Validators are paid in newly minted tokens -> Supply increases -> Price pressure decreases -> Requires constant hype to maintain price.

• Frogment Model: Node Operators are paid in Real Revenue generated from network usage.

5.2 The "Stable-to-Native" Gas Loop

Since users pay fees in Stablecoins (e.g., USDC), but the network needs to secure the Frogment Token (FRGMNT) value, we utilize an automated protocol-level swap mechanism.

The Economic Flow:

1. User Action: User sends 100 USDC and pays a 0.01 USDC fee.

2. Collection: The Protocol collects the 0.01 USDC.

3. Value Injection:

   • Option A (Buyback & Burn): The protocol programmatically buys FRGMNT from the open market using the collected USDC and burns it, reducing supply.

   • Option B (Direct Yield): The collected USDC is distributed directly to Node Operators and FRGMNT Stakers.

5.3 Incentivizing Node Operators

Why would a Node Operator run a Frogment Node if there are no inflationary rewards?

• Sustainable Revenue: Operators earn "Hard Cash" (Stablecoins) or Deflationary FRGMNT tokens. As the network usage (stablecoin volume) grows, the yield grows.

• Token Value Correlation:

  
• This creates a direct link between the Utility of the chain and the Price of the token, ensuring that the token represents actual ownership of the network's bandwidth.