> For the complete documentation index, see [llms.txt](https://docs.cortexdao.com/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://docs.cortexdao.com/fundamentals/tokenomics-101.md).

# Tokenomics 101

![](https://miro.medium.com/max/1400/0*wQWLcfixeDdnI6mh)

## Token Glossary <a href="#id-2708" id="id-2708"></a>

* **CXD:** The tradable CortexDAO token, currently available on [Curve](https://curve.fi/factory-crypto/52).
* **vlCXD:** The [locked](/tokenomics/usdcxd/locking-cxd-for-vlcxd.md) CortexDAO token.
* **idxCVX:** The tradable Convex Index token.

## Token Utility <a href="#cxdtokenutility101" id="cxdtokenutility101"></a>

Locking the CXD token for vlCXD grants access to:&#x20;

* **Fee distribution.** A portion of protocol revenue is distributed to CXD lockers.&#x20;
* **Governance.** Vote to update, change, and revise protocol system parameters.&#x20;
* **Boosted Index returns.** Holding CXD + any CortexDAO Index = increased Index APR!

We designed the CortexDAO tokenomics to foster DAO growth and reward CXD lockers, those most committed to the long-term vision of the protocol. We set four goals to maximize value for CXD lockers:

1. Encourage and reward DAO participation.
2. Encourage CXD buy pressure.
3. Encourage [locking](https://medium.com/cortexdao/cxd-locking-is-now-live-f8c71a27c4c2).
4. Decrease sell pressure.

## Deflationary Token Flywheel <a href="#bdee" id="bdee"></a>

A user who purchases and locks CXD can earn idxCVX. Similarly, a user who purchases and stakes idxCVX can earn CXD. This creates tokenomics that are sustainable and deflationary.

![](https://miro.medium.com/max/1400/0*TieJu9TAa8Uo27hS)

*Locked CXD earns idxCVX from fee distributions. Staked idxCVX earns CXD rewards.*

1. Users buy **CXD**.
2. Users **lock** **CXD** to **earn vlCXD**. This **reduces the circulating supply**.
3. Users **earn idxCVX from fee distribution.**
4. Users **stake idxCVX to earn CXD**.
5. Users **lock** their newly **earned** **CXD** to **repeat the cycle**.

## vlCXD Token Utilities

### Fee Distribution <a href="#a904" id="a904"></a>

![](https://miro.medium.com/max/1400/0*460hPa36RqlTpi1g)

1. The Convex Index collects a **15% fee** on [harvested rewards](https://dune.com/0xandrew/CortexDao-Token-Metrics) as the main revenue stream.
2. A portion of revenue is used to cover protocol expenses such as deployment, staking, harvesting, and claiming.
3. **All profits are then distributed to vlCXD holders as 3CRV.\***
4. Users can redeem 3CRV for USDC, USDT, or DAI from [Curve’s 3pool](https://curve.fi/3pool).

*\*Once the Convex Index token (idxCVX) is launched, profits will be distributed in idxCVX.*

### Boosted Index Rewards <a href="#id-2b14" id="id-2b14"></a>

Once idxCVX is released, vlCXD will boost idxCVX staking rewards.

1. Users **buy idxCVX** to gain exposure to the Convex Index.
2. Users **buy and lock CXD** to **earn vlCXD**.
3. Users **earn CXD** from **boosted idxCVX staking rewards.**

### Governance <a href="#f126" id="f126"></a>

vlCXD will be used to create and vote on DAO proposals. A soon-to-be-released DAO constitution will define the proposal process.

## Additional Resources

* [Tokenomics Dune Dashboard](https://dune.com/0xandrew/CortexDao-Token-Metrics)
* Users can purchase CXD from [Curve](https://curve.fi/factory-crypto/52) (additional listings coming soon).&#x20;
* [Tokenomics](/tokenomics/usdcxd.md)
* [CXD/USDC Liquidity provision](/tokenomics/liquidity-provision.md)
* Price feed ([CoinGecko](https://www.coingecko.com/en/coins/cortexdao))