A Token is a flexible equity unit issued by a project under the FlexUp Economic Model. It represents financial rights (the right to receive a share of future profits) and may also represent governance rights (e.g.: the right to vote on key decisions in the Assembly). Tokens are issued to Associates as compensation for taking risk related to the Project’s ability to pay flexible commitments.

They are conceptually similar to shares or stock in conventional economic systems, but adapted to the FlexUp model (they are not necessarily linked to actual shares or stock in a company, but they can be).

Position in the priority structure

Tokens are a type of flexible commitment with a specific priority level (named "Token") that sits within the equity group of priorities. They rank below superflex and are equivalent to credit.

There are two types of tokens:

• Primary tokens:
  • They are issued when an Associate accepts payment entirely in tokens instead of cash or credits.
  • For example, if the token index is 5 €/token and an Associate agrees to a €100 payment fully in tokens, they receive 20 tokens.
• Secondary tokens:
  • These are issued as a bonus to compensate for the risk taken on flexible commitments.
  • The quantity of secondary tokens depends on the risk factor of the tranche, which is defined in the payment term applicable to that tranche.
  • For example, if the risk factor is 80%, the Associate receives 80% of the payment in secondary tokens. If the payment is €100, they receive 80 tokens at the current token index (e.g., 16 tokens if the token index is 5 €/token).

The Token Index is the reference value used to calculate how many Tokens are issued when someone earns a token-based commitment. It has a default initial rate and may be adjusted by the Assembly, but must never become negative.

Tokens may be paid during t**oken buyback resolution** but ****they do not have a due date until a valid buyback request is made and declared valid.

Related terms: Credit, Equity, Flexible Commitment, Assembly, Priority, FlexUp Economic Model