# Carats Tokenomics

1. **Summary:** Carats are a commodity token issued from Diamond Standard Coins and Bars 
2. **Issuer:** Bitcarbon Foundation (Cayman Islands)
3. **Distribution:** Available worldwide with direct purchase via the Carats App (Carats.cc), [diamondstandard.co/carats](https://diamondstandard.co/carats) or via Bitrue Exchange, Blade Wallet, Hashpack Wallet, or 
4. **Platform:** Hedera HTS, and ERC-20, others coming soon
5. **Supply:** No fixed supply of Carats. To create Carats, additional Diamond Standard commodities must be produced, and attached to the Carats reserve. The supply of Carats is directly limited by the quantity of Diamond Standard commodities in the market.
6. **Demand:** With the financialization of diamonds via spot commodities, futures, options,  exchange traded funds, and for Islamic finance and digital asset applications, we foresee a significant potential growth in the demand for natural diamonds. This increased demand is could have an impact on the market price of diamonds, Diamond Standard commodities, and on the price of Carats.
7. **Distribution:** No reserved advance tokens have been allocated for employees, venture capitalists, or developers.  No Carats can be created without contributing a physical Diamond Standard commodity.
8. **Fees:** There are currently no transaction fees when using Carats, or redemption fees when converting to or from physical commodities.  The costs of custody and operations are paid by collecting a fee on the reserve, through a gradual increase in the ratio of Carats per Diamond Standard Coin, currently set at 1.5% per annum based on the total in-network assets.   This parameter is determined by the DAO.
9. **Utility of Carats:** 

* **Web3 Payments** -- Carats are a decentralized, asset backed commodity that appears to be exempt from many global money transmitter regulations. As such, Carats are especially useful for global Web3 payments.
* **Diamond Investment Access** -- Carats are a convenient way to invest in the diamond market with reduced barriers compared to traditional methods of purchasing and storing physical diamonds, 
* **Security**:  Carats are a decentralized asset and protocol, managed by a DAO and Foundation, governed by Bitcarbon token holders.  Carats can only be created in connection with the wireless 2,048 encryption chip for a Diamond Standard commodity held in an approved, insured custodian vault. 
* **Usability**: Carats, in sufficient quantities, can be redeemed for physical diamond commodities at any time. 

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