Token Classification

SBT is a native protocol token. Its precise classification matters for both user understanding and legal compliance.

What SBT Is

• A governance token. SBT holders vote on witnesses, committee members, and governance proposals. Holding SBT grants real, on-chain protocol influence.
• A network incentive token. Block producers are compensated in SBT for securing the chain. LP providers earn SBT rewards from the dedicated emission allocation. Both are earned by providing a service, not by passive ownership.
• A progressively deflationary protocol token. Two independent supply-reduction mechanisms operate from genesis: unallocated LP emission burn (year-end, volume-independent) and fee-funded buyback-and-burn (activated by governance at the $1M daily volume milestone). Circulating supply trends downward under all growth scenarios.

What SBT Is Not

• Not a stablecoin. No peg, no reserve, no stabilisation mechanism. Supply management is not responsive to price.
• Not a security. SBT does not represent ownership in any company, does not entitle holders to dividends, and does not constitute a share in SwapBlok's revenue. LP SBT rewards are earned by providing liquidity, a functional service, not a passive investment return. The Foundation has sought independent legal opinion confirming this classification across its primary operating jurisdictions.
• Not an asset-referenced token. SBT does not reference any external asset or basket of assets. Its value is determined by governance participation demand, witness reward demand, and the deflationary pressure of the fee buyback programme.
• Not a toll token. There is no gas cost to use SwapBlok. SBT is not required to pay fees on the protocol.