# Deflationary Token Economy

## Introduction <a href="#introduction" id="introduction"></a>

The AUDT Token powers the network of Pacioli AI Validating Nodes which make up the world's first web3 disclosure automation and ["Proof of State"](https://blog.auditchain.finance/what-is-proof-of-state-77026845da46) external validation expert professional services network.

The Pacioli AI Validating Node is integrated with the Luca Suite which enables the creation, automation and communication of financial and non-financial structured disclosure information and the creation of the Process Controls that make them compliant, accurate and truthful.&#x20;

SYMBOL: AUDT

The parent AUDT Token contract address on Ethereum is: [0xb90cb79b72eb10c39cbdf86e50b1c89f6a235f2e](https://etherscan.io/token/0xb90cb79b72eb10c39cbdf86e50b1c89f6a235f2e)

The child AUDT Token contract address on Polygon is: [0x91c5A5488c0dEcde1Eacd8a4F10e0942fb925067](https://polygonscan.com/address/0x91c5A5488c0dEcde1Eacd8a4F10e0942fb925067)

## Token Supply Allocation

The maximum supply is 250,000,000. The table below illustrates the allocation.&#x20;

| ALLOCATION     |      AMOUNT     | PERCENTAGE |
| -------------- | :-------------: | :--------: |
| Early Adopters |    43,700,351   |   17.48%   |
| Team           |    25,833,333   |   10.33%   |
| Advisors       |    25,833,333   |   10.33%   |
| Treasury       |    71,299,649   |   28.52%   |
| Bounty         |    12,500,000   |    5.00%   |
| Subsidies      |    45,000,000   |   18.00%   |
| Liquidity      |    25,833,334   |   10.33%   |
| **TOTAL**      | **250,000,000** |  **100%**  |

## Staking <a href="#audt-token-functionality" id="audt-token-functionality"></a>

The staking requirement to operate a Pacioli AI Validating Node is initially set at 14,000 AUDT and is subject to [governance](https://docs.pacioli.ai/deflationary-token-economy#governance).&#x20;

## **Settlement**&#x20;

### **Who Pays?**

* Reporting entities for structured disclosure and and Process Control validation.
* Data Subscribers for analysis of financial statements.
* Creators of Process Controls to prove that they work correctly.

### **Who Receives Payment?**

* Validators of structured disclosure instances and Process Controls receive rewards.
* Process Control Creators receive royalties when their Process Controls are used.
* Validators receive royalties when Process Controls validated by them are used.

## **Governance**&#x20;

Monetary policy is set by the community. Changes in functionality are immediately invoked upon the passage of a vote on the following functions:

* Changes to the maximum number of Pacioli AI Nodes
* Changes to the minimum Pacioli AI Node staking requirements&#x20;
* Changes to the amount of rewards paid to validators through subsidies
* Changes to the amount paid by the user requesting the validation
* Changes to the allocation of proceeds from data subscriptions between reporting entities and the cohort of validators
* Changes to the minimum staked balance required for continued compliance by a reporting entity (fair warning)
* Changes to the minimum number of validators in a cohort
* Changes to the minimum percentage of validators in a cohort required to achieve consensus

## Deflation

Assuming a price of $.075, an average of 5% of the maximum supply is removed from circulation each year as the result of the subsidy allocation and is subject to price fluctuation. See [Reward Allocation](https://docs.pacioli.ai/rewards#rewards)

The net reduction in circulation in the first three years is estimated below.

| PERIOD    | AMOUNT         |
| --------- | -------------- |
| Year 1    | 3,163,250      |
| Year 2    | 7,165,833      |
| Year 3    | 26,393,750     |
| **TOTAL** | **36,722,833** |

#### &#x20;<a href="#claim-contracts" id="claim-contracts"></a>