# $HDS Token Economics

There are many roles in Honingdas Network's protocol matrix, such as liquidity providers / recipients, depositors / lenders, traders, developers, and community contributors.

We believe that the double token model is the most suitable for open financial token model, by stable asset protocol and experimental asset protocol (such as FUSD, UBillNFT, etc.) as the network trading tokens and composite application tokens, and system core governance tokens ($HDS token) assume the role of escort, to ensure the network effect of the platform and provide practical.

As an open financial protocol network, the core value of Honingdas Network networks is driven by the liquidity around the protocol, asset / tokens reserves, and network effects.

Token models need to form positive feedback rings to achieve better benefit binding through sustainable long-term incentives.

$HDS tokens, as the applied token of the platform, can conduct platform governance, mortgage verification, dividend incentive, fee payment and provide insurance.

**The $HDS token has the following functions:**

**Governance tokens**

$HDS tokens act as a tool for governance voting in ecosystem and community engagement. The governance function determines that the holders of $HDS tokens also have the right to adjust Honingdas Network native protocols, such as modifying, expanding, developing key functions in the Honingdas Network protocol matrix, or adding application scenarios for $HDS tokens, Honingdas Swap and Honingdas · finance governance proposals and voting.

To achieve a fully decentralized on-chain governance requires a long and gradual process. We believe that compared with the degree of decentralization of governance, it is more important to find the market positioning and verification suitable for agreements and products first.

**Payment of agreement fee**

The $HDS tokens can be used to pay for agreement fees in the Honingdas Network ecosystem, including coinage fees, pin-down fees, interest payments in the lending market, etc.

For example, in the FUSD protocol, when the user needs to reverse destroy the FUSD and take back the underlying components, it needs to pay in the form of the $HDS token.

**System stabilizer**

$HDS tokens are the last line of security to protect all Honingdas Network protocols in the event of extreme events, system bad debts, and hacker malicious attacks on lending and trading protocols. For example, if an agreement goes wrong or gets attacked, it causes a lot of bad debts. In this case, we will pay off bad debts and recapitalize the agreement by issuing additional $HDS tokens or auctions.

**Incentive tokens**

$HDS tokens is the final system token of Honingdas Network protocol matrix and its ecological platforms (such as lending market, decentralized exchange, etc.). Therefore, it is a tool to obtain the economic value of the whole system, and also the main means to encourage lending, liquidity mining, and interest pledge coins.

**Equity pledge tokens**

The purpose of the equity pledge model is to ensure the consistent action of all parties, the on-chain governance and consensus advancing with The Times, and to encourage the long-term participation of all parties.

The overall design goal of the equity pledge model is to ensure the long-term effectiveness of motivating $HDS holders, attract more participation and contribution from non-arbitrage users, and help us build a more neutral, self-motivated and interoperable infrastructure.


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