# Tokens Overview

Server Protocol introduces a dual-token system to balance economic sustainability, user participation, and community-driven governance:

### $SERVER – The main token

* **Purpose**: $SERVER is the primary token of the ecosystem. It is used to fund grants for open-source projects, reward contributors, and fuel staking.
* **Staking**: Users can stake $SERVER to earn $BYTES, incentivizing long-term support of the protocol.
* **Fees**: Actions such as proposing a project or voting require small fees in $SERVER, which are directed to the Treasury to sustain future initiatives.
* **Treasury accumulation**: Rather than burning all $SERVER fees, they are collected to strengthen the financial stability of the protocol.
* **Total supply**: 100 billion $SERVER, with strict distribution rules to ensure healthy long-term growth.

### $BYTES – The governance and participation token

* **Purpose**: $BYTES are earned by staking $SERVER and are burned when voting or proposing projects.
* **Voting**: Users use $BYTES to cast votes for projects they believe should receive funding.
* **Proposal mechanism**: A significant amount of $BYTES is required to propose a new project, ensuring only serious proposals are submitted.
* **Burn and dynamic emission model**: Every time $BYTES are used for voting or proposing projects, they are burned and permanently removed from circulation.\
  While the $BYTES supply is dynamically generated through $SERVER staking, the burn mechanism continuously decreases the circulating supply, ensuring constant pressure towards scarcity and strengthening its utility-based value.

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### Key design elements:

* **Balanced participation**: Holding $SERVER strengthens your position, but true influence requires active usage of $BYTES, ensuring that power remains in the hands of the active community.
* **Dynamic engagement**: Staking $SERVER without participating reduces your future $BYTES rewards, aligning incentives toward genuine involvement.

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This dual-token architecture ensures a healthy separation between capital ($SERVER) and governance ($BYTES), making Server Protocol a fairer, more robust, and more sustainable ecosystem for developers and users alike.
