4.3 Sustainability of Tokenomics

In the Fanpla Economic Zone, proper tokenomics design is adopted to sustainably grow the value of FPL.
The main factors that typically undermine the soundness of tokenomics include the following.

Main Factors Undermining the soundness of Tokenomics

• Oversupply: If the number of tokens issued is set excessively or if there is no upper limit to the number of tokens issued, the supply of tokens circulating in the market (hereinafter referred to as "circulating supply") will become excessive, which can diminish the token’s value.
• Lack of demand: If the project's attractiveness and utility are insufficient, the motivation to hold the tokens weakens. As a result, users and investors may become more inclined to sell, which can impair the token's value.
• Imbalance in supply and demand adjustment: An increase in participants prioritizing only temporary profits can undermine the stability of the token's value. Additionally, if governance does not function properly during abrupt external market changes, the supply and demand balance can break down, resulting in a decline in the token's value.

The Fanpla Economic Zone avoids these risks by preparing its own mechanisms on both the demand and supply sides and managing both accurately, aiming for a positive cycle of tokenomics and sustainable value improvement of FPL.

Demand Side

• Existing Market: This project is characterized by the fact that it is a token issued with the cooperation of Fanplus, which has over 700 artists and over 4 million paid members, one of the largest in Japan, and therefore the token circulates in a market that already has position in the Japanese music market.
• Provision of Abundant Utilities: Through major services such as "Marketplace," "Artist Treasury," "Staking," and "Music Awards," we will provide a place where artists and fans can connect and support each other more directly. By cooperating with artists to provide abundant utilities, we will increase the number of places to use FPL and improve the value of FPL by stimulating demand for FPL.
• Design of Economic Zone Participation Benefits: Through the Fanpla project, artists can obtain new forms of activity funds and create an environment where they can concentrate on original creative activities and the fans who support them. On the other hand, fans can directly connect with and support their favorite artists, and support the realization of a sustainable creative environment for artists. We will improve the value of FPL by pursuing long-term participation benefits in the economic zone.

Supply Side

• Setting the Upper Limit of the Maximum Supply: FPL has a maximum supply of 10 billion tokens. By setting this upper limit, inflation is suppressed and the design prevents a decrease in value due to oversupply. Also, 64.9% of the maximum supply of 10 billion tokens is allocated to the ecosystem part, and an additional issuance method is adopted. This allows tokens to be issued at the appropriate timing, and the soundness of the ecosystem is maintained while adjusting the supply.
• Suppression of Supply by Staking: By preparing staking functionality, we aim to suppress the circulating supply and enhance the value of the token. In the Fanpla Economic Zone, we have two types of staking services: "Artist Staking" for fans and "Fanpla Pool" for all users.
• Adjustment of Supply by Strict Governance System: Additional issuance of tokens will be implemented through a documented approval process. We are also considering limiting the circulating supply by locking up a portion of the revenue from the Fanpla Economic Zone, such as marketplace fee revenue, for a certain period of time. The locked-up FPL will support the sustainable growth of the economic zone and will be used in the future for rewards to contributors to the ecosystem and activities that contribute to the development of the economic zone.

In this way, in the Fanpla Economic Zone, we have established a market scale with sufficient achievements on the demand side, and we would like to connect it to the stability and improvement of the sustainable value of FPL by adjusting the circulating supply under a strict governance system on the supply side.

*The services and features scheduled to be provided through the Fanpla system are based on plans as of September 2025 and will be released gradually after the IEO. Details about the content and functions will be announced once they are finalized.