> For the complete documentation index, see [llms.txt](https://docs.pearl.exchange/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://docs.pearl.exchange/tokenomics/ecosystem-tokens.md).

# Ecosystem Tokens

Pearl utilizes the two-token model popularized by Solidly and now a foundation in leading  incentives-based liquidity hubs.

### `$PEARL` Token

`$PEARL` (ERC-20) is our main utility token. DEX emissions are distributed as `$PEARL`, which are used as farming rewards to incentivize deep liquidity in active trading ranges, optimizing trading conditions. Only staked liquidity in the active trading range is eligible to earn `$PEARL.`

#### `$PEARL` Emissions

Users who add liquidity and stake their positions are eligible to earn `$PEARL`.

* `$PEARL` emissions are distributed over time, is similar to other liquidity layers including Pearl v1, encouraging persistent liquidity that doesn’t move in response to market conditions
* Only liquidity provided in the [active range](/dex-operations/concentrated-liquidity/providing-liquidity-to-pools.md#adding-liquidity-to-pools) earns `$PEARL` emissions, maximizing capital efficiency by only rewarding useful liquidity

`$PEARL` initial token supply at launch was 50 million. Each Epoch, additional tokens will be emitted into circulation.  A breakdown of `$PEARLS`'s [initial distribution](/tokenomics/initial-supply-and-distribution.md) and [emissions schedule](/tokenomics/emissions-schedule.md) have been included in the docs.

### `$vePEARL` Token

`$vePEARL` (ERC-721 aka NFT) is the vote-escrowed version of `$PEARL`. The `$vePEARL` token implementation now adheres to OpenZeppelin standards, ensuring enhanced security and reliability.

#### Initial Vesting Duration

Users can lock i.e. vote-escrow their `$PEARL` tokens for up to 2 years to get `$vePEARL`, giving them the power to vote on the platform's gauges, which control how emissions are allocated to the various liquidity pools on Pearl.

The vesting duration signifies the amount of time it will take for tokens to unlock when deposited into the vesting contract. The longer the initial vesting duration i.e lock, the higher the amount of voting power received.

* 100 `$PEARL` initially vested (locked) for two years will become 100`$vePEARL`
* 100 `$PEARL` initially vested (locked) for six months will become 25`$vePEARL` (less voting power)

#### Non-Decaying Voting Power and Vesting Contract Interaction

Pearl v1 and other ve-style DEX require users to renew their lock durations on an ongoing basis to preserving their voting power. 

Pearl v2 implements non-decaying voting power. Unlike the previous system, `$vePEARL` voting power does not decay over time by default. There is no need to relock the `$vePEARL` position at any time to maintain vote share. 

The vote share from the initial vesting duration is maintained unless the user chooses one of two available options:

1. Extend the initial vesting duration, which can be done freely at any time to increase voting power. Referencing the second vesting scenario above, that user could extend from six months to a two-year vest at any time in order to increase the vote power to 100 `$vePEARL`.
2. Deposit `$vePEARL` into the vesting contract to begin the process of "unlocking" the position to reclaim the `$PEARL`.

Once `$vePEARL` is deposited into the vesting contract, the vesting duration and, consequently, the voting power will decrease over time. A two-year initial vest will take two years in the vesting contract to release all the tokens.

* While deposited, the remaining vesting duration and, consequently, the voting power, will decrease over time.
* Tokens can be withdrawn from the vesting contract at any time.

{% hint style="danger" %}
**`$vePEARL` in the vesting contract cannot vote nor accrue rewards.**

Vote power will default to zero while in the vesting contract and the user will forfeit their right to vote as the vesting contract is the current owner of the `$vePEARL.` However, users are free to unvest, vote, claim rewards, and revest `$vePEARL.`

Vesting time accrued carries over even if the token is removed from the contract.
{% endhint %}

#### **`$vePEARL` Utility**

`$vePEARL` token positions can be increased, split up, and resold on a secondary market at any time.

* Gauge Incentives: Holders earn incentives by [voting](/dex-operations/pool-voting-and-incentives.md) for gauges on the protocol. These votes are done weekly and determine how `$PEARL` emissions will be distributed between gauges the following Epoch. Voters collect 100% of bribes posted weekly for each pool.
* Governance: Holders will participate in *future* governance, voting for protocol improvement proposals and shaping the evolution of Pearl.

{% hint style="info" %}
A "gauge" is a farming smart contract that takes deposits in one asset (typically an LP token, a vault token, NFT position, etc.) and rewards the depositor yield in another token. These are typically governance tokens like `$PEARL` when yield farming on a ve(3,3) exchange.
{% endhint %}