Source: [Tokens](https://sapio.network/docs/dual-token)

# Tokens

Sapio uses two tokens with different roles. SRT represents a reserve claim. SAPIO supports governance and competition.

## SRT: the reserve token

SRT means Sapio Reserve Token. Each Sapio instance has its own reserve and SRT.

Each SRT represents a proportional claim on the assets in that reserve. A basket is the set of reserve assets in their recorded quantities.

You mint SRT by depositing the required basket quantities. You redeem SRT by returning it for the recorded basket claim. The protocol burns the redeemed SRT.

Ordinary minting and redemption leave existing rounding surplus unchanged. The final redemption returns all remaining assets, including that surplus.

These operations need working contracts and transferable reserve assets. Redemption returns assets, not a fixed cash value. Reserve prices and the asset mix can change.

The specified Multilateral Matching Engine adds selected-asset routes. Those routes need a complete executable trade across the basket. See [The Multilateral Matching Engine](https://sapio.network/docs/ccmm.md) for its scope and implementation status.

## SAPIO: governance and competition

SAPIO does not represent a reserve claim. Proposers lock SAPIO to support proposed reserve changes. The locked SAPIO and the system's stake form the competition's stake pool.

More stake gives a proposal more initial influence within the movement limit. More influence does not guarantee a profit.

Each competition fixes a reference price for each eligible asset before entry. These reference prices stay fixed for that competition. Later checkpoints compare new prices with the reference prices.

Settlement prices determine payments for delivered assets. They do not change the reference prices used for competition scoring.

The system benchmark represents the current reserve. Proposer positions and the benchmark compete under the same performance rule. Each payout depends on all eligible positions in the SAPIO pool.

SAPIO governance sets eligibility, timing, price rules, movement limits, default penalties, and upgrade controls. Governance does not choose each competition's target.

## Many reserves

Each Sapio instance has its own reserve, eligible assets, competition rules, and SRT. Instances can share SAPIO governance.

An instance can hold other SRTs. Reserve claims must not form a circle. Each claim must lead to underlying assets.

The proposed **Multi** instance aims to connect several reserves. See [The Master Key](https://sapio.network/docs/master-key.md) for this long-term vision.

## Possible future fees

SRT fees are a possible future feature. This description does not specify a fee design.

For the competition steps, see [Competitions](https://sapio.network/docs/competitions.md).