# Pencils Protocol Economy

In Pencils Protocol, $DAPP is the system token primarily used for governance, Auction Platform collateral, and Point System rights mapping, and notably, it does NOT pay dividends.

### **Governance** 

$DAPP enables holders to actively participate in community voting, influencing decisions on development directions, interest rate impacts, protocol policies, and emergency measures, ensuring a democratic governance structure.

### **Token Farming**

To encourage long-term holding and boost community engagement, the $DAPP token staking program will launch after TGE. Token holders can stake $DAPP in Pencils Protocol Farms to receive $pDAPP, an equity certificate token, at a 1:1 ratio. Additionally, $pDAPP holders can earn subsidies by staking $pDAPP or provide $pDAPP liquidity on DEX. 

### **Auction Platform Collateral**

To list assets on the Auction Platform, sellers are required to stake $DAPP. This staking mechanism serves as a safeguard against malicious activities, with the community overseeing the auction process. In instances of misconduct, the staked $DAPP is redistributed among community members.

### **Vaults Privileges**

Users staking $DAPP in Vaults will accumulate multiple points from Pencils Protocol and its partners, providing access to various benefits. These privileges include higher leverage multiples and priority access to exclusive, limited strategy products.

### **Expansion of Financial Services**

Pencils Protocol is committed to integrating the $DAPP token into a variety of DeFi products. Planned financial solutions include liquidity protocols and lending services, allowing users to optimize their asset allocation by providing liquidity, borrowing, or participating in staking, and earning additional rewards from these activities.

### **Point System Rights Mapping** 

Early adopters of Pencils Protocol receive Pencils points, which are linked to rights in $DAPP. These points grant them access to new farming methods and exclusive policies, fostering deeper community involvement and loyalty without the expectation of dividend payouts.

### **Virtual Shop**

In the Virtual Shop, users can leverage $DAPP for trading margin in NFTs, Real-World Assets (RWAs), points, and derivatives, expanding the utility and application of their holdings within the Pencils Protocol ecosystem

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