5. Token Utility

Usage Scenarios

Internal scenarios

• STON Staking — governance rights and derivatives. When STON is staked, an equal number of ARKENSTON and GEMSTON are minted. The issuance volume scales linearly with the lock-up term. This links the token to governance and incentivizes long-term staking.

• Fee Capture. All protocol fees are automatically converted into STON and then routed through the Fee Distributor contract (for burns, staking rewards, liquidity mining). This creates direct market demand for STON.

• Buyback & Burn (deflationary model). Part of the fees converted into STON are burned, reducing circulating supply and creating a “price sink” for the token.

User scenarios (ecosystem/market)

• DAO governance participation. Holders stake STON and receive ARKENSTON, enabling them to initiate and vote on protocol parameters (fee models, new features, network expansions, fee distribution).

• Farming/liquidity incentives. By DAO decision, flows converted into STON may be directed toward LP/staking rewards (liquidity mining, staking incentives), enhancing strategy yields and anchoring capital in the protocol.

Optional scenarios (enabled via DAO governance)

• Fee discounts for STON holders. The whitepaper outlines the option of reduced fees for STON holders/stakers — enabled and calibrated through governance.

• Incentive indexing to ARKENSTON weight. Contracts may distribute rewards proportionally to ARKENSTON holdings, acting as a “boost” mechanism for long-term stakers.

• Staking parameters (term ranges). Practically applied lock-up terms (e.g., 3–24 months) are defined by the interface and DAO decisions, influencing ARKENSTON/GEMSTON issuance and supply dynamics.

Impact on token economy

• Staking and governance participation remove part of the supply from circulation and increase the value of participation (voting weight, rewards).

• Simultaneous conversion of protocol fees into STON and periodic burning form steady demand and a deflationary effect.

• As a result, DEX performance (fee volume) directly translates into STON market dynamics, while holders gain utility that extends beyond speculation.