# Tokenomics The Talos tokenomics are designed to support our high-yield, cooperative model, with the AI Protocol Owner at the center. The native TALOS token is the backbone of the ecosystem, used for both governance and staking. Here’s how it works: ### Backed by a Strong Treasury * **Real-Asset Backing:**\ TALOS is backed by a diversified treasury of yield-bearing assets from the Arbitrum ecosystem. This treasury provides a baseline of intrinsic value for the token. * **Smart Supply and Rewards:**\ Staking rewards are issued based on a bonding curve that scales with cooperative staking. As more users stake and the treasury grows, the protocol issues new tokens in proportion, ensuring that rewards are backed by real value, not just inflation. ### Efficient Capital and Liquidity * **Pooled Resources:**\ By owning its own liquidity and pooling assets, Talos can deploy capital more efficiently across various yield strategies, minimizing risk and maximizing returns. * **Value Growth:**\ As the treasury earns yield, profits are either reinvested or used to buy back TALOS tokens, increasing the token's backing. This creates a positive feedback loop that benefits long-term stakers. ### Governance and Utility * **A Single, Powerful Token:**\ TALOS is used for both governance and staking rewards. This unified model prevents fragmentation and concentrates value in a single asset. * **Built-in Demand:**\ Additional uses for the token, like collateral for vault access or fee reductions, create natural demand, helping to sustain the token's value as the ecosystem expands. The Talos tokenomics create a **self-reinforcing economy**: the more the community works together through staking and governance, the stronger the treasury becomes, which in turn increases the token's value and rewards. --- # Agent Instructions: Querying This Documentation If you need additional information that is not directly available in this page, you can query the documentation dynamically by asking a question. Perform an HTTP GET request on the current page URL with the `ask` query parameter: ``` GET https://docs.talos.is/tokenomics.md?ask= ``` The question should be specific, self-contained, and written in natural language. The response will contain a direct answer to the question and relevant excerpts and sources from the documentation. Use this mechanism when the answer is not explicitly present in the current page, you need clarification or additional context, or you want to retrieve related documentation sections.