# Tokenomics
## Two-token Structure
COIL and staked COIL tokens (SPR tokens) are the tokens used as a catalyst to kick-start protocol adoption, reward contributions, and align incentives between protocol stakeholders.
### **Coil** token (COIL)
* most liquid/target of Protocol Owned Liquidity (POL)
* represents a portion of Treasury assets
* redeemable
* a highly inflationary token and stackable in exchange for a high APR (2x of POL in gauges)
* COIL emissions dynamically adjust to COIL price movements
* distributed during auctions
#### COIL single staking
Token holders can stake their COIL tokens to receive COIL token rewards. This ensures that token holders are protected from dilution caused by the inflationary nature of COIL whilst receiving a decent APR. In exchange for staking, COIL users receive a wrapped version of COIL — SPR, with each SPR representing a growing number of COIL tokens. Staking APR may vary to better fit market conditions.
### **Spiral token** **(SPR)**
* represents governance power for all of the treasury assets
* distributed for staking liquidity into Spiral DAO Convex/Balancer/Frax liquidity pools with additional yield
* a staked version of COIL
* protects from COIL's inflationary pressure
* represents an increasing amount of COIL
* lockable for profit-sharing in the future
### Why Spiral DAO tokenomics is a game changer?
Spiral DAO tokenomics has been designed keeping in mind the dilutionary pressure associated with yield farming. Instead of receiving highly inflationary reward tokens users will receive a portion of the DAO — wrapped COIL (SPR tokens) — which is backed by a growing market share of all the tokens held within the Spiral DAO treasury (BAL/CRV/FXS/USD/SDT to start). Each SPR token is designed to be backed by more tokens as time passes (the SPR backing ratio should grow exponentially).
SPR vs treasury backing dynamics according to our simulation
> You can check out a model for Spiral DAO in [Machination](https://my.machinations.io/d/spr-2-test/27bae6d34b1c11ed9a660626ff1c9bc8).
{% content-ref url="tokenomics/token-allocation" %}
[token-allocation](https://docs.spiral.farm/protocol/tokenomics/token-allocation)
{% endcontent-ref %}
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