VCRAFT, the governance token of BitVault, offers several compelling use cases that benefit token holders and contribute to the protocol's growth and stability.

Protocol Governance

VCRAFT holders have the power to participate in BitVault's governance process. They can propose and vote on important protocol decisions, including:

• Adjustments to protocol parameters

• Addition of new collateral types

• Changes to fee structures

• Allocation of protocol revenue

Revenue Sharing through Buybacks

A significant portion of BitVault's protocol revenue is used to buy back VCRAFT tokens from the open market. This mechanism provides several benefits to VCRAFT holders:

• Increased token value: Buybacks reduce the circulating supply of VCRAFT, potentially increasing its price

• Passive income: Holders can sell their tokens during buybacks for profit

• Enhanced protocol stability: Buybacks help maintain a healthy token economy

Liquidity Mining Incentives

To encourage liquidity provision for bvUSD and VCRAFT pairs:

• Liquidity providers can earn additional VCRAFT rewards

• This helps maintain deep liquidity for BitVault's ecosystem

Collateral for Borrowing

While not the primary collateral type, VCRAFT may be used as additional collateral within the BitVault system in the future:

• Allows holders to leverage their VCRAFT holdings

• Potentially increases capital efficiency for users

By focusing on these use cases, VCRAFT serves as a crucial component of the BitVault ecosystem, aligning the interests of token holders with the protocol's success. The buyback mechanism, in particular, creates a strong value proposition for VCRAFT holders, as it directly ties the token's value to the protocol's performance and revenue generation.

The VCRAFT token distribution is designed to balance ecosystem growth, contributor incentives, and long-term protocol sustainability.

Core Contributors (up to 20%)

A portion of bvUSD is allocated to the core contributors who have supported the protocol’s development. These tokens are subject to a one-year cliff with 50% unlocking, followed by one year linear vest. No tokens will be accessible before the initial one-year period.

Investors (20%)

The investor allocation represents token rights obtained by investors backing the BitVault protocol’s development, to bootstrap both the protocol and the treasury to support BitVault's launch. All investors are locked on a one-year cliff with 50% unlocking, followed by one year linear vest. No tokens will be accessible before the initial one-year period.

Treasury (40%)

The Treasury allocation will be used to further initiatives that serve to widen the reach of bvUSD, reducing crypto’s reliance on traditional banking rails and fiat-backed centralized stablecoins. This bvUSD will be used to fund further development, risk assessments, audits and much more.

Ecosystem, Marketing, & Liquidity (30%)

To accelerate the adoption of bvUSD and strengthen its position within the DeFi ecosystem, 30% of VCRAFT will be strategically allocated across ecosystem development, marketing, and liquidity. This allocation is designed to drive sustainable growth, enhance market efficiency, and support the long-term success of bvUSD.

1. Ecosystem Growth & Development

A portion of VCRAFT will be deployed to expand the bvUSD ecosystem, funding initiatives such as:

• Developer Grants & Incentives – Supporting projects that integrate bvUSD into DeFi protocols, wallets, and payment solutions.

• Cross-Chain Expansion – Facilitating bvUSD’s presence across multiple blockchains to enhance interoperability.

2. Marketing & Community Engagement

To drive awareness and adoption, a share of this allocation will be used for:

• Incentive Programs – Rewarding early adopters and active community members.

• Partnerships & Sponsorships – Collaborating with key DeFi platforms, exchanges, and influencers to increase visibility.

• Educational Initiatives – Hosting campaigns, content creation, and events to promote bvUSD’s utility and benefits.

3. Liquidity & Market Stability

A portion of this allocation will be directed toward liquidity incentives to support:

• AMM & DEX Liquidity Pools – Ensuring deep liquidity for trading pairs involving bvUSD.

• Liquidity Mining & Staking Rewards – Encouraging participation in protocols utilizing bvUSD.

• Market-Making & Stability Mechanisms – Supporting on-chain and exchange liquidity to enhance trading efficiency.

Governance & Execution

This allocation will be managed by a DAO-controlled treasury, ensuring transparent deployment and alignment with the long-term vision of bvUSD. Adjustments and optimizations will be made as needed to maximize impact.

This structured approach ensures that VCRAFT fuels the expansion of bvUSD, reinforcing its adoption, liquidity, and overall utility in DeFi. 🚀