# VAGA Coin

VAGA is the native coin of the VagaChain blockchain. It’s a hard-capped, scarce asset that is used to pay for fees, secure the platform through staking, and provide a basic unit of account within the VagaChain v20 token standard ecosystem.

## Tokenomics

* **Max Supply:** 200M
* **Max Circulating Supply:** approx. 80M
* **Genesis:** 42M
* **Genesis Distribution:** 2M Vagabond (Validator) + 40M Community Airdrop
* **Inflation Rate:** 0.2

### Genesis Coin Distribution <a href="#id-7bcf" id="id-7bcf"></a>

A fixed amount of 42M VAGA was minted at genesis. VAGA's initial distribution did not involve an Initial Coin Offering (ICO) or Token Sale. Instead, VAGA was [airdropped](../vaga-airdrop) to the Vagabond community, specifically to VGO (BSC) and VGB (XRPL) token holders, at a 1:1 distribution ratio. 40M was allocated for the community , and the remaining 2M was allocated for the Vagabond Validator on the network and used as stake.

### Inflation

To incentivize network security and participation, validators receive VAGA as rewards, minted at the end of their staking period. With an inflation rate of approximately 0.2 per block and being significantly below its supply cap, VAGA is designed as an inflationary asset.

{% hint style="info" %}
**Note:**

The smallest unit of VAGA is the uVAGA, or the micro VAGA, where:

&#x20;<mark style="background-color:blue;">1 uVAGA</mark> = <mark style="background-color:blue;">0.000001 VAGA</mark>
{% endhint %}

#### Inflation Distribution

The newly minted VAGA coins are allocated as follows:

* 50% are distributed to the validator rewards pool, incentivizing network security and participation
* 50% are distributed to the Vagabond utility pool. This pool is utilized to offset miscellaneous transaction fees incurred from the use of modules and applications on the Vagabond Platform.

Once the circulating supply reaches 80M, 100% of the newly minted coins will be allocated to the Vagabond utility pool.

#### Vagabond Utility Pool

Coins from this pool are burned post-usage, ensuring a deflationary mechanism and maintaining the coin's scarcity. Importantly, the Vagabond utility pool is strictly for utility purposes, and its usage has no impact on the circulating supply or market dynamics of VAGA.

***

## VAGA Utility

* **Staking**: VAGA coins can be staked or delegated to help secure the network. In return, stakers earn rewards.
* **Transaction Fees**: VAGA is essential for fee payments on all VagaChain transactions and smart contract interactions. This ensures the network's protection against spam and compensates validators for their service.
* **Collateral**: VAGA can be used as collateral within decentralized finance (DeFi) applications on VagaChain, enabling users to borrow or lend other assets.
* **Cross-Chain Transfers**: Through the IBC protocol, VAGA facilitates and may be required for cross-chain transfers or swaps, ensuring seamless interoperability with other blockchains.
* **Governance and DAO Participation**: VAGA coin holders with a stake can participate in on-chain governance, influencing the network's direction, potential upgrades, and specific decentralized autonomous organization (DAO) proposals. This allows them to have a say in decisions and the allocation of resources.
* **Access to Premium Services**: Holding or spending VAGA grants users access to premium services or features on the Vagabond platform and other applications built on VagaChain. This includes Vagabond's offerings, which can be accessed using VAGA or fiat converted to VAGA through the Vagabond Payment Gateway.
* **Burn Mechanism**: Once the total VAGA supply reaches its 200M cap, a mechanism will be activated to burn a portion of the transaction fees. This ensures a hard cap on the coin's supply, enhancing its scarcity and value proposition.

