> For the complete documentation index, see [llms.txt](https://forforest.gitbook.io/for/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://forforest.gitbook.io/for/for-en/tokenomics-and-governance/6-tokenomics-and-governance.md). # 6 Tokenomics and governance From the outset, FoR positions the “forest” as its largest stakeholder, and is designed so that appreciation in token value directly contributes to the growth of natural capital. The use of funds is determined not by centralized decision-making, but by decentralized consensus within the community. #### 6.1 Token Supply and Initial Allocation FoR will generate 10,000,000 FoR as its initial issuance. The allocation is designed to maintain a balance among direct returns to the ecosystem, the core members driving the project, and the community. * **Initial issuance:** 10,000,000 FoR * **20% Direct allocation to the Forest Regeneration Fund (Pledge):** We pledge to always allocate 20% of the total supply directly to the Regeneration Fund. As FoR acquires economic value, the asset value of the fund will also rise automatically, enabling investment in larger-scale natural regeneration projects. * **15% Founders’ Core Team:** Allocation to the founding members. A four-year vesting schedule, including a one-year cliff, clarifies responsibility for long-term growth. * **45% Community Ecosystem:** Compensation for on-the-ground care practitioners, and distributions to partners who utilize FoR. * **20% Liquidity and Treasury:** Liquidity provision, and reserves for future strategic partnerships and fundraising. The value-linked asset allocation described in Chapter 3 is a future amplification mechanism that will function from Phase 3 onward, once FoR has acquired backing from liquid assets (such as ETH or JPYC) and become connected to secondary markets. The linkage by which increases in the value of assets held by the fund expand the resources available for forest regeneration is intended to connect ecosystem growth directly to the expansion of regenerative activity. We clearly recognize, however, that this mechanism presupposes an increase in value. The fund’s most basic source of capital is the 10% that is returned with every transaction, and this accumulates independently of price fluctuations in external markets. Value linkage is only an “amplifier” layered on top of this foundation; it is not a condition for regenerative activity to exist. If value rises, care accelerates; if it does not, the fund sustained by the returned flow continues to function. #### 6.2 Allocation and Uses of the Forest Regeneration Fund Each time FoR is used, 10% of the amount used is automatically allocated to the Collective Wallet (Forest Regeneration Fund). FoR pooled in the regeneration fund functions as a form of “reinvestment in the Earth,” returning to the field as legitimate compensation for the maintenance costs of natural resources that have long been externalized in market economies as having a “zero price.” The 10% return rate of the transaction amount is set as a balance point between two constraints. The upper constraint is user acceptability. If the return rate is too high, the sense of burden—“the more you use FoR, the more you lose”—will suppress circulation itself, and money will stop moving. For FoR to function as an everyday means of payment, it must remain at a level that users can recognize without experiencing it as a burden. Even compared with typical consumption tax or the surcharge on donation-linked products, 10% sits at this boundary. The lower constraint is the amount required on the ground. If the return rate is too low, the fund will not accumulate sufficiently, and it will be unable to deliver meaningful resources for forest care. Given the expected circulation volume, it is possible to determine a minimum level that secures the capital necessary for regenerative activities on the ground to continue sustainably. This ratio is also intuitively easy for users to grasp: they can understand, without explanation, that “10% of what I spend returns to the forest.” This transparency and clarity are also important elements in building trust. However, 10% is not a fixed optimal value. The actual user experience, circulation velocity, and the direct costs required for on-the-ground care vary by field. In the Phase 1 proof-of-concept, we will treat this return rate as one of the main variables to be tested, and adjust it toward an optimal level while measuring both user acceptability and the capital required on the ground. The regeneration fund will be used for the following purposes. * **Direct regeneration costs: 6.0%**\ Returns to the field (direct payments for concrete care activities such as thinning, undergrowth cutting, tree planting, road building, and soil improvement) * **Operating costs: 3.0%**\ System maintenance and liquidity reserves (secretariat operations, and development and maintenance costs for shared tools connecting local regions, such as Toban, while curbing sharp fluctuations in token value and preserving long-term purchasing power) * **Governance and education: 1.0%**\ The resources for co-creation (facilitation of voting and consensus-building processes, educational programs, and the implementation of civic science) #### 6.3 **Introduction of decentralized governance (proposal)** Once FoR has achieved sufficient value and circulation (Phase 2 onward), we will introduce a governance protocol for determining which forest in which region will receive the accumulated regeneration fund, and by what methods. Decision-making will not be left to the discretion of any specific organization; it will be carried out through decentralized consensus within the community. Here, we will adopt an algorithm that prevents wealth from concentrating in regions with greater financial power or louder voices, and that ensures equitable funding across diverse bioregions. * **Subjects of decision-making:** Voters determine the allocation of the fund by voting on regeneration project proposals submitted from each bioregion. In this way, resources are delivered transparently to the sites where they are most needed and where they have earned the community’s support. * **Quadratic Funding (QF):** If one token equals one vote, the intentions of financially powerful actors will be disproportionately reflected, and small satoyama landscapes or experimental projects risk being excluded. QF is a voting system in which activities that receive broad support can obtain greater backing. * **Status-based weighting:** Voting rights are not determined solely by token holdings; FoR’s own status is also incorporated into the QF calculation. The aim is to design a system in which the votes of practitioners and local residents who sweat in the field and continuously contribute to the cycle of care are valued more highly than the votes of holders whose purpose is speculation. The voting process and fund transfers are recorded on the blockchain and can be verified by anyone. This technology addresses the longstanding problem of environmental taxes and donations: that it is difficult to see what the funds were actually used for. FoR is not a static system, but aspires to become a “living protocol” that continues adapting to changes in the natural environment and local economies. For that reason, the various parameters described in this section—such as allocation ratios and voting-right formulas—may be changed and optimized based on operating results and discussions within the community. --- # Agent Instructions This documentation is published with GitBook. GitBook is the documentation platform designed so that both humans and AI agents can read, navigate, and reason over technical content effectively. Learn more at gitbook.com. ## Querying This Documentation If you need additional information that is not directly available in this page, you can query the documentation dynamically by asking a question. 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