The $CLOAK Token
$CLOAK is a utility token tied to how protection fees work on Cloak. It is not required to use the app — the standard protection fee described in Fee Policy always applies without it.
What it's for
- Discounting the protection fee for swaps routed through the protected path
- Funding the split described below — buybacks and ongoing development — once protection fees are actually being collected
Fee discount tiers
Holding (not necessarily staking) $CLOAK will reduce the protection fee at swap time:
| Tier | $CLOAK held | Protection fee discount |
|---|---|---|
| Tier 1 | 1,000+ | 10% |
| Tier 2 | 10,000+ | 25% |
| Tier 3 | 50,000+ | 50% |
Discounts apply only to the protection fee itself — the base swap fee stays at 0% either way, and holding $CLOAK never creates a fee where one wouldn't otherwise apply.
Revenue allocation
Once Shield ships and protection fees start being collected, revenue is split two ways — no share sits idle in a discretionary wallet:
| Allocation | Share | Purpose |
|---|---|---|
| Buyback & Burn | 50% | Buys $CLOAK from the open market and burns it — ties token supply directly to real protected-swap volume, not speculation. |
| Development & Operations | 50% | Funds the actual cost of running Shield (relay/RPC infrastructure), audits, and continued product development. |
Development & Operations funding isn't optional overhead skimmed off the top — Shield has real, ongoing infrastructure costs (low-latency relay access, RPC), and this share is what keeps that path funded and maintained.
What $CLOAK is not
- Not required to swap on Cloak — it only affects the protection fee discount
- Not a governance token at this stage
- Not an investment product — holding $CLOAK is a fee-discount utility, not a claim on profit from the efforts of others, and carries no promise of value, buyback schedule, or allocation split shown above (all draft, all subject to change before launch)
$CLOAK has not been deployed — there is no live contract to audit yet. See Validation & Limitations. Not financial advice.