> ## Documentation Index
> Fetch the complete documentation index at: https://docs.tiprotocol.io/llms.txt
> Use this file to discover all available pages before exploring further.
# Utility and value cycle
> TIP's utility is tied to the experience of the people who actually use Ti. Service-linked uses open in stages, and no link in the cycle promises holders interest or dividends.
A token matters when it is used. TIP's utility is designed to tie into the experience of the people who actually use Ti. Those who use Ti more earn rewards, holders who stay longer get better terms, and those holders set the direction of the ecosystem. As the service grows, the results flow back into token supply through buyback and burn. The service-linked uses in this chapter open in stages, with the status shown in the table below.
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## 1. Utility
TIP currently provides standard ERC-20 functions. Utility linked to the service will open in stages.
| Utility | Description | Status |
| - | - | - |
| **Transfer, permit and burn** | Standard ERC-20 transfers, signature-based permit approvals, burning by holders | Available |
| **Mission and community rewards** | Rewards for check-ins, missions, invites and community programs, paid in TIP from the Ecosystem allocation | Planned after listing |
| **Holder benefits** | Higher Ti AI question limits, swap and Gasless fee benefits, early access to new features | Planned |
| **Gasless fee payment** | TIP added as a fee token for Gasless mode | Planned |
| **Governance** | Holder votes that decide the use of the ecosystem fund, the addition of new chains and stablecoins, fee parameters and similar matters | Planned |
| **Buyback and burn** | Once a protocol fee is introduced, part of the revenue buys TIP on the market and burns it | Planned |
***
## 2. Rewards: a share for the people who use Ti
The Ecosystem allocation, 40% of TIP's total supply, goes to the people who use and grow Ti. Missions & Rewards currently pays rewards in USDC and USDT ([Chapter 9](https://docs.tiprotocol.io/protocol/products.md)). Once TIP is listed, part of these rewards will be paid in TIP. As a principle, rewards go to activity tied to using the service. Check-ins and missions reward steady use, invites reward bringing in new users, and community programs reward content and feedback.
Rewards can be paid only within the release schedule of the Ecosystem vesting contract. The Ecosystem allocation releases nothing for the first 3 months after TGE. From month 4, it releases the same amount every month over 48 months (1/48 of the total, about 8.33 million TIP), so the structure itself prevents the reward budget from reaching the market all at once. Reward rules and budgets are published in advance for each program.
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## 3. Holder benefits
Ti plans to give TIP holders benefits that make Ti easier to use: a higher daily Ti AI question limit, fee benefits on swaps and in Gasless mode, and early access to new features. The benefit tier will be set by the TIP balance of the signed-in wallet, and holders will not need to lock or deposit their tokens. To stop users from buying TIP only around the reference time that sets tiers, collecting the benefits and then selling, Ti is considering using the average balance over a set period. The tier criteria and the benefits themselves will be published before launch.
***
## 4. Protocol fee and buyback and burn
Ti's quotes currently carry no separate protocol fee. The costs a user pays are the shares taken by external protocols and blockchains, such as pool fees, bridge fees and network fees. In Gasless mode, a fee is added to settle the network fee that the relayer paid on the user's behalf. Quotes show these costs as they are. Once the service is established, Ti may introduce a protocol fee. If it does, it will follow these principles.
**1. Set through governance**
The introduction, rate, cap and use of the fee are decided through the process in [Chapter 13](https://docs.tiprotocol.io/tip-token/governance.md) and published before they take effect.
**2. Shown separately in the quote**
The protocol fee is not mixed with other costs. It appears as a separate line in the quote and is fully reflected in the comparison of amounts received.
**3. Part of the revenue always goes to buyback and burn**
The rest is assigned to the ecosystem fund and operations, and governance sets the allocation ratio.
**4. Buybacks and burns are recorded**
The Governance Safe buys TIP on the open market and destroys the purchased TIP with the burn function. A burn reduces `totalSupply()`, so anyone can verify the result, and the hashes of the purchase and burn transactions are published regularly.
Once introduced, buyback and burn scales with use of the service. What matters is that supply is reduced with revenue from real transactions, not with speculative expectations.
***
## 5. Value cycle
TIP's value cycle starts from real use of the service; links tagged “Planned” are not live yet.**TIP**- **User activity**Swaps · Ti AI · Missions
- **Protocol fees**Planned**Buyback & burn**PlannedSupply reduction
- **Ecosystem fund**
- **Missions & rewards**
Back to users**TIP holders**Benefits · Governance (planned)Governance · Decides fee and fund use- Live flow
- Dashed: a flow that involves a planned item
View figure full size
**Figure 28.** TIP's value cycle starts from real use of the service; links tagged “Planned” are not live yet.
Drawn as a single cycle, TIP's utility looks like this. Users use Ti through swaps, Ti AI and missions. As usage builds up, protocol fees arise (planned). Part of them reduces TIP supply through buyback and burn, and another part goes into the ecosystem fund. The ecosystem fund and the Ecosystem allocation fund missions and rewards, which bring users back. TIP holders receive benefits and, through governance, decide how fees and the fund are used. No link in this cycle promises holders interest or dividends. What drives the cycle is real use of the service.
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## 6. What TIP is not
TIP is not equity in any company, and it grants no right to claim profit distributions, interest or residual assets. Holder benefits and governance participation are rights exercised within the service, and their terms will be published before they take effect. Staking rewards that distribute protocol revenue to holders are not part of the design. Holding TIP does not guarantee any return.
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