# Tokenomics

SIR holders can stake their tokens to earn a share of protocol fees. All fees are converted to the chain's native wrapped token (WETH on Ethereum, WHYPE on HyperEVM, WETH on MegaETH) through an [auction system](https://docs.sir.trading/protocol-overview/token-auctions) and distributed to stakers, providing a direct claim on the protocol's revenue.

The SIR protocol features a carefully designed token economy that aligns incentives across all participants while ensuring long-term sustainability. This section explores how the three-token system works together to create a self-reinforcing ecosystem.

## Overview

At its core, SIR solves a fundamental DeFi challenge: how to sustainably incentivize liquidity while capturing value for token holders. The protocol achieves this through:

* **Three specialized tokens** (SIR, TEA, APE) each serving distinct roles
* **Permanent liquidity accumulation** through protocol-owned liquidity
* **Constant token emission** ensuring fair opportunity for all participants
* **Mathematical optimization** for efficient capital allocation

## Section Contents

### [🎩 SIR Token Mechanics](https://docs.sir.trading/protocol-overview/sir-a-dividend-paying-token/sir-token-mechanics)

* **Flexible Operations:** Stake, unstake, and claim dividends at any time
* **Dividends:** All protocol fees are converted to the chain's native wrapped token via [auctions](https://docs.sir.trading/protocol-overview/token-auctions) for consistent payouts
* **Pro-rata Distribution:** Rewards proportional to your staked share

### [💰 Economic Model](https://docs.sir.trading/protocol-overview/sir-a-dividend-paying-token/economic-model)

Explore the three-token ecosystem from a business perspective. Understand how APE traders, TEA providers, and SIR holders interact to create value, and why constant issuance beats traditional capped supply models.

### [🍰 Token Distribution](https://docs.sir.trading/protocol-overview/sir-a-dividend-paying-token/token-distribution)

Detailed breakdown of how SIR tokens are allocated during the bootstrap phase (years 1-3) across Ethereum, HyperEVM, and MegaETH, and the transition to 100% liquidity provider rewards thereafter.

## Getting Started

New to SIR? Start with the [Economic Model](https://docs.sir.trading/protocol-overview/sir-a-dividend-paying-token/economic-model) to understand the big picture, then explore [SIR Token Mechanics](https://docs.sir.trading/protocol-overview/sir-a-dividend-paying-token/sir-token-mechanics) for technical details on staking and rewards.