# Tokenomics

Solidex operates with a dual-token system to manage its utilities and governance:

**1. SDX (ERC-20)**

* Type: Utility token of the protocol.
* Distribution: Allocated to liquidity providers through emissions.
* Incentives: SDX holders can lock their tokens to receive veSDX, unlocking additional rewards and governance rights.

**2. veSDX (ERC-721)**

* Type: Governance token represented as an NFT (non-fungible token).
* Benefits:
  * Share in trading fees and associated pool incentives.
  * Voting power to influence emission distributions and protocol governance decisions.
  * Participation in shaping the protocol’s future through proposal voting.

This structure aligns utility and governance to foster active participation and sustainable growth for the Solidex protocol.
