Tokenomics

The final POLAR allocation, vesting schedule and launch parameters will be published closer to launch once finalized.

This section focuses on the economic principles behind POLAR.

Supply

POLAR will launch with an initial supply of 100 million tokens, allocated across the treasury, community, team, and investors.

Beyond this initial allocation entering circulation gradually according to its vesting schedules, new POLAR can only be created through the Conversions mechanism. As a result, every new POLAR requires pETH to be permanently converted before entering circulation.

For example, if market participants want more POLAR than is available at attractive prices on secondary markets, they can convert pETH into newly minted POLAR through the protocol’s Dutch auction. That conversion burns pETH, expands POLAR supply and routes value back into the pETH economy.

As the protocol grows, pETH grows alongside it by capturing protocol-native value. Since every additional POLAR entering circulation beyond the initial allocation is created from pETH, the POLAR supply can only grow when demand leads participants to convert pETH within the protocol’s conversion parameters, so that the utility token remains economically connected to the system it serves.

A Closed Economy

Polaris is designed as a closed economic system where the value generated by protocol activity remains inside the ecosystem.

Polaris redistributes value generated by its core protocol mechanisms across the ecosystem based on the role each asset plays, without relying on continuous token emissions.

Treasury-held POLAR participates through vePOLAR alongside every other long-term holder, aligning incentives across the ecosystem.

In practice, this means the Polaris treasury does not receive a privileged fee stream simply because the protocol is being used. If the treasury wants exposure to protocol revenue, it must commit POLAR as vePOLAR and participate through the same mechanism available to every other vePOLAR holder.

vePOLAR

Long-term participation in Polaris takes place through vePOLAR.

Users commit POLAR for a chosen period of time to align with the long-term growth of the ecosystem. In return, they receive a share of protocol-native value from supported pAsset markets, together with stewardship rights.

For example, a USDp minter pays interest to the USDp market. Part of that interest is distributed to vePOLAR holders. If the minter also holds vePOLAR, those distributions can offset part of the interest they pay, lowering their effective minting cost.

These returns are distributed through protocol activity itself, without additional POLAR incentives.