# Overview

## $PRSM Tokenomics

$PRSM is a transferable representation of designated utility functions outlined in the Prism Market protocol’s code. These functions include governance, liquidity, and staking.

* Governance: $PRSM will serve as voting power in the Prism DAO, enabling token holders to create and vote on proposals affecting the ecosystem. These proposals encompass protocol upgrades, parameter adjustments, incentive alignment, and other significant decisions. For more information, see [\[Governance\]](/governance/overview.md).
* Liquidity: The Prism Treasury smart contract, serving as both the treasury account and supply key for $PRSM, governs its minting and distribution. $PRSM minted by this contract are used to incentivize liquidity provision on Prism Market and external DEXs (e.g., SaucerSwap). For more information, see [\[Liquidity Mining\]](/protocol/liquidity-mining-limit-order-mining.md).
* Staking: $PRSM tokens allow users to participate in staking activities, offering them a share of settlement fees and emissions through the Safety Module. For more information, see [\[Single-Sided Staking\]](/protocol/single-sided-staking.md).

***

### Initial Supply

A total of 20 million $PRSM tokens are initially released. Tokens in the Liquidity category are seeded into DEX pools, while those in the NFT Sale category are distributed to eligible participants of the Initial NFT Offering (INO).

#### 💧 Liquidity (2%)

2% of the max supply (2 million $PRSM) is converted to liquidity positions (PRSM/HBAR and PRSM/USDC), which are subsequently locked for 1 year to ensure trading stability.

#### 🖼️ NFT Sale (18%)

18% of the max supply (18 million $PRSM) is distributed to community members holding Prism Market NFTs based on the tier of NFT held

| Category  | Number of Tokens  | % of Initial Supply | % of Max Supply |
| --------- | ----------------- | ------------------- | --------------- |
| Liquidity | 20.0 million      | 10.00%              | 2.00%           |
| Community | 180.0 million     | 90.00%              | 18.00%          |
| **Total** | **200.0 million** | **100.00%**         | **20.00%**      |

***

### Allocation Breakdown

The total supply of 100,000,000 $PRSM is distributed across five core buckets to ensure long-term alignment and ecosystem growth.

| **Category**         | **Allocation %** | **Amount ($PRSM)** | **Description**                                                                    |
| -------------------- | ---------------- | ------------------ | ---------------------------------------------------------------------------------- |
| Community Incentives | 50%              | 50,000,000         | Liquidity mining, staking rewards, and ecosystem growth.  6 year vesting schedule. |
| Initial Supply       | 20%              | 20,000,000         | Tokens released immediately at TGE (NFT Airdrop + Initial Liquidity).              |
| Team                 | 20%              | 20,000,000         | Allocated to core contributors. Subject to a 2.5-year vesting schedule.            |
| Prism Labs Treasury  | 8%               | 8,000,000          | Reserved for operational costs, marketing, and partnerships.                       |
| Prism DAO Treasury   | 2%               | 2,000,000          | On-chain treasury managed directly by token holders.                               |


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