Abstract

ARC exists to empower community-driven innovation that builds, supports, maintains, and secures a safer future for Web3. The Reactor and its surrounding ecosystem is fueled by the participation from its users of a broad community of builders, developers, service providers, and more to succeed. This overview will help you understand how the core facilitating component of the ecosystem, the ARC token, is distributed and utilized to support the growth of this ecosystem.
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It's important to make the distinction between a token distribution schedule and the utilities of that token. This overview describes the functions of the utility token, its new soon to be born synthetic partner and how both tokens play a crucial role in the evolution of the ecosystem. The distribution, allocation and  unlocking frequency of the tokens has also been highlighted and reiterated in this document to assist in providing clarity.

1. What is a Cryptocurrency?

A cryptocurrency is the native asset of a blockchain network that can be traded, utilized as a medium of exchange, and used as a store of value. A cryptocurrency is issued directly by the blockchain protocol on which it runs, which is why it is often referred to as a blockchain’s native currency. In many cases, cryptocurrencies are not only used to pay transaction fees on the network, but are also used to incentivize users to keep the cryptocurrency’s network secure. 

Cryptocurrencies typically serve as a medium of exchange or store of value. A medium of exchange is an asset used to acquire goods or services. A store of value is an asset that can be held or exchanged for a fiat currency at a later date without incurring significant losses in terms of purchasing power.

Cryptocurrencies typically exhibit the following characteristics: 

• Decentralized, or at least not reliant on a central issuing authority. Instead, cryptocurrencies rely on code to manage issuance and transactions.

• Built on a blockchain or other Distributed Ledger Technology (DLT), which allows participants to enforce the rules of the system in an automated, trustless fashion. 

• Uses cryptography to secure the cryptocurrency’s underlying structure and network system.

2. What is a Token?

Tokens are also referred to as Crypto Tokens and are basically a unit of value that companies create on the top of existing blockchain networks. For example, the native token for the Ethereum blockchain network is called ETH. While many other crypto tokens have also been created utilizing the existing Ethereum network which are LINK, COMP, crypto kitties, etc. Each of these tokens might have various functions depending on the platforms they are built for using smart contracts. 

There is a huge variety of tokens that currently exist in the market and most of them utilize the Ethereum blockchain network. As per crypto auditor, they use the ERC-20 token standard most commonly as it interoperates with Ethereum Ecosystem. They also use ERC-721 which enables non-fungible tokens, which are unique and cannot be interchanged with any other token. These tokens are often used by platforms to issue a token to the user for providing an NFT and the token has all the information of the owner and transactions coded to it. Due to their use, the number of tokens available on the network is constantly increasing every day. 
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• Tokens are programmable

• They are also permissionless 

• They are decentralized which means that no central authority can control it and it runs on the regulation put down by the network protocol. 

• The transactions and protocol are viewable and verifiable by all the users having the tokens which makes it completely transparent as well.

A. Some common types of cryptocurrency tokens

• Utility Tokens
  Utility tokens are designed to be used as a means of exchange within a specific platform, network, or ecosystem. They do not have any intrinsic value outside of their use within their environment, and they are not intended to be used as a form of investment.

• Security Tokens
  Security tokens represent ownership of an asset, such as a company's stock or real estate. They are subject to federal securities laws and are intended to be used as a form of investment.

• Asset-backed Tokens
  Asset-backed tokens derive their value from, and are backed by a physical asset, such as gold, fine art, gems, or real estate. They can be used as a way to trade the underlying asset, and may be subject to regulations depending on the specific asset and jurisdiction.

• Payment Tokens
  Payment tokens are designed to be used as a means of transacting payment(s) and can be used to purchase goods and services from merchants that accept them.

• Stablecoins
  Stablecoins are designed to be pegged 1:1 to the value of a fiat currency, such as the US dollar (USD), in order to reduce price volatility.

• Governance Tokens
  Governance tokens are used to give the token holders a voice or vote in the governance of a decentralized autonomous organization (DAO) or other decentralized platform.

• Non-Fungible Tokens (NFTs)
  NFTs represent a unique asset, such as a digital collectible or a piece of art, and they cannot be exchanged for other tokens on a one-to-one basis.

3. What is $ARC?

$ARC is an ERC-20 Token. An ERC-20 token is a type of digital asset that is built on the Ethereum blockchain. It conforms to a set of standards, known as ERC-20, which define a common set of rules for all Ethereum-based tokens. This standardization allows for interoperability between different tokens, as well as ease of development for new projects. ERC-20 tokens can be used for a variety of purposes, such as representing a unit of value, a digital asset, or a right to participate in a decentralized platform. They are created and managed using smart contracts on the Ethereum blockchain.‍

What is $ARC’s Utility?

• Rewards & Airdrops

• Staking $ARC earns you a share of rewards that we generate from  partnership deals involving tokens, NFT’s, and the Reactor

• To access the ARC Reactor, $ARC must be staked to allow access, thus removing liquidity from circulation

• Gas Fees for Reactor (future)

• Governance (future)

• Staking $ARC in a Farm 2.0 generates the $stARC token - the reward sharing mechanism reflected as a % of the staker’s $ARC of the total liquidity pool 

4. What is $stARC

$stARC is a synthetic reward token with no value outside of the $ARC ecosystem. The price of $stARC is set and will not fluctuate. $stARC is a reward token and can’t be purchased.

The volume of $stARC issued will be directly correlated to the volume of funds in the LP (highlighted in blue) not by the price of $ARC.

$stARC has its own LP and this will be automatically topped up by the Company’s revenue pooled in 3 areas:

• ARC Bank Account

• ARC Reactor Treasury

• ARC Decentralised Treasury

Illustrated below some of the key elements of the interactions between different processes within the ecosystem.

• When a user stakes $ARC in Farms 2.0 they will start to accumulate $stARC tokens as a reward.[You will notice that ARC staked to access the Reactor (Stake for Service Access (POS) is not eligible for $stARC]

• $stARC will be used as a reward token, and the amount issued to individuals will be in direct correlation the following factors:

• 1. The volume of revenue being generated and deposited into the liquidity pool (highlighted in blue)

• 2. The amount of tokens held by a specific user in farms
  

• $stARC can not be farmed or staked and it can not generate yield. The only way to earn stARC is to stake ARC

• Equity investors will be paid dividends in $ARC up until their allocation has been depleted. After the $ARC tokens have been depleted, equity investors will be paid in stable coins

• When $stARC goes live it will be the sole reward for staking in our Farms

• $stARC can't be compounded or staked, only burned for $ETH

A. Converting $stARC to ETH

When the user wants to convert their $stARC rewards into $ETH, they can sell their $stARC which will burn the synthetic token and exchange the value of the tokens for the amount equal in $ETH.

As $stARC has a fixed value it acts as a reward on company performance and the sale of the $stARC tokens will have zero (0) price impact on the $ARC Utility Token.

As the Reactor and DeFi ecosystem expands in size and scope, so does the liquidity sent to the LP.  This growth* increases the volume of $stARC issued, which in turn, increases the reward amount. In future giveaways, and rewards from partnerships, a % will be deposited into this fund in order to increase the volume of $stARC tokens distributed.

$stARC will be deployed along with Farms 2.0 in Q3 2023 and as ARC continues executing  its Roadmap, the community will be updated with all facets of development via social media outlets, Newsletters, and other publications.

‍*Note if the revenue decreases so do the rewards sent in $stARC

5. Token Unlock Schedule

To further provide clarity around the $ARC token and its distribution, this section explains the unlock schedule and overall Tokenomics.
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Token Circulation
At present there are 535,095,675 tokens in circulation (as at 12 Jan 2023).https://www.coingecko.com/en/coins/arc33.69% of these tokens are staked in ARC Farms (as at 12 Jan 2023).
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Volume
At present (as at 12 Jan 2023) there are 460,004,324 $ARC tokens locked in Unicrypt’s Vault (210m added on [05 Jan 2023] for an additional 12 months).
https://etherscan.io/token/0xc82e3db60a52cf7529253b4ec688f631aad9e7c2?a=0xdba68f07d1b7ca219f78ae8582c213d975c25c‍
Frequency
The 460m tokens locked in Unicrypt are set to unlock at 18:00 UTC on the 29th of each month concluding on the 29th August 2024, at 18:00 UTC (20 unlocks scheduled from January 2023 with the sum of 12.5m tokens each month). The final 210m tokens will be released on 13 January 2024. ARC reserves the right to lock these tokens again for a period of time depending on the need to access these tokens for cross chain expansion, CEX listings, partnerships and marketing campaigns.
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$ARC token unlock schedule