> For the complete documentation index, see [llms.txt](https://predictex.gitbook.io/docs/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://predictex.gitbook.io/docs/token-utilities/predict-net-utility.md).

# Predict-Net Utility

### **Predict-Net DAO Governance**

In order to vote as part of the Predict-Net DAO, $PREX token holders will need to bond their $PREX tokens via the bonding portal. $PREX bonding operates under a time-weighted voting model, granting long-term $PREX holders greater governance weight and control of the Predict-Net DAO (via non-transferable vePREX – the unit of Predict-Net governance power).

The bonding period (also commonly known as vote-escrowed period, hence the ‘ve’ prefix), can be chosen in monthly increments, subject to a 1-month minimum lock-up and a 12-month maximum. vePREX units will be provided to $PREX bonders based on their chosen bonding period according to the below relationship:

vePREX = Amount of $PREX tokens bonded × (bonding period in months / 12)

Predict-Net DAO also offers an automatic re-bonding option. This allows users to instruct the Predict-Net smart contracts to automatically re-bond $PREX tokens, in exchange for vePREX, upon expiry of their previous bonding period (can only be used to automatically re-bond for the same bonding period as previously authorized).

### **Bonding Rewards for Predict-Net DAO Governance**

In exchange for providing this valuable governance role to the Predict-Net DAO, vePREX holders will earn rewards (in USDC) which will vary depending on the operating phase of the Predict-Net stability reserve. This yield will be distributed to Predict-Net bonders proportional to their vePREX holdings.

### **Supply Reduction (at Discretion of Predict-Net DAO Governance)**

Holders of $PREX tokens will benefit from supply deflation via a supply reduction mechanism governed by the Predict-Net DAO.

The Predict-Net DAO votes on governance proposals related to the health of the Predict-Net Stability Reserve, including the application of Predict-Net balances deemed excess to requirements during the Normal Operating and Overflow Phases. Upon a successful vote on this matter, any funds (USDC) deemed excess to requirements will be used for $PREX supply reduction.

The supply reduction program will entail irrevocably removing $PREX tokens from the total token supply of $PREX.

Whilst minimum Predict-Net balances (in USDC) are enforced at the smart contract level, the timing and magnitude of these supply reduction decisions is at the discretion of the Predict-Net DAO during the Normal Operating and Overflow Phases and is subject to a successful governance vote.