Tokenomics
LITHO Native Token
LITHO is the native utility token of the Lithosphere network. It serves multiple critical functions across the ecosystem:
Cross-chain and intra-chain transactions: LITHO is used to pay for gas fees and facilitate value transfer both within the Lithosphere network and across bridged chains.
Security deposits: Verification nodes must stake LITHO as a security deposit to participate in consensus, aligning validator incentives with network health.
Currency of choice: LITHO acts as the primary medium of exchange within the Lithosphere DeFi ecosystem.
Token Design
The LITHO token economics are structured around five foundational elements:
1. Total Supply
The total supply of LITHO is capped at 1 billion tokens. This fixed ceiling ensures scarcity and provides a predictable monetary policy for the network.
2. Distribution System
LITHO operates under a limited supply, non-inflationary model. No additional tokens beyond the initial 1 billion can ever be minted, preserving value for long-term holders and participants.
3. Allocation
Token allocation follows a structured distribution:
10% reserved for the core team
Approximately one-third allocated to accounting nodes (validators)
Remainder directed toward ecosystem growth, development funding, and community incentives
4. Foundation
More than 50% of tokens are allocated to the KaJ Labs Foundation to fund cross-chain, cross-organization, and cross-data development initiatives. This ensures sustained investment in the network's core mission of blockchain interoperability.
5. Fuels and Miners
Nodes are compensated through a combination of token release schedules and service fees collected from network transactions. This dual-revenue model provides both predictable baseline rewards and performance-based income.
Funding Distribution
The initial token distribution follows this breakdown:
Fundraiser donors
70%
Lead donors
5%
KaJ Labs Foundation
10%
Network awareness
10%
Core team
10%
Staking Rewards
From the Kamet milestone onward, one-third of total $LITHO is rewarded to bonded validators and delegators on an annual basis. This reward structure incentivizes long-term staking and network participation while maintaining a predictable emission schedule.
LAX Algorithmic Stablecoin
LAX is the algorithmic stablecoin native to the Lithosphere ecosystem. Unlike traditional stablecoins, LAX maintains its peg through algorithmic supply adjustments rather than collateral reserves.
Key Properties
Target value: Always worth $1 USD
Not pegged to USD reserves or crypto collateral
Dynamic supply: Determined by real-time supply and demand dynamics
Rebasing mechanism: The protocol adjusts the total supply of LAX every 24 hours to maintain the $1 target price
How Rebasing Works
When LAX trades above $1, the protocol increases supply proportionally across all holders, creating selling pressure to bring the price back down.
When LAX trades below $1, the protocol decreases supply proportionally, creating scarcity and buying pressure to push the price back up.
LAX Use Cases
LAX serves several functions within the Lithosphere ecosystem:
Yield generation: LAX can be deployed in DeFi protocols to earn yield while maintaining stable value.
Leverage: Traders can use LAX as a stable base for leveraged positions.
Liquidity provision: LAX pairs provide stable liquidity in decentralized exchanges.
Collateral: LAX is accepted as collateral across the Lithosphere ecosystem for lending, borrowing, and other DeFi activities.
Roadmap Funding
The following diagram illustrates the funding allocation across the project roadmap milestones:
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