> For the complete documentation index, see [llms.txt](https://source-code-systems.gitbook.io/better-bank/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://source-code-systems.gitbook.io/better-bank/tokens-of-betterbank.md).

# Tokens of BetterBank

BetterBank’s ecosystem operates through two core tokens: **Esteem ($ESTEEM)** and various forms of **Favor ($PDAIF, $PLSF, $PLSXF upon launch)**. 

#### **Esteem ($ESTEEM) – Governance & Ownership**

Esteem is the **primary governance and ownership token** of BetterBank. Holding Esteem represents **partial ownership** of the protocol, allowing users to participate in its growth while benefiting from its expansion.

* **Seigniorage Rights** – **Staking Esteem in** one of the Wildlands **Groves rewards** its corresponding type of **Favor** continuously to the participant.
* **Elastic Supply** – **Esteem may be minted or burned** at any time by users of BetterBank, **ensuring** a stable correlation between **supply and demand**.
* **Minting & Rewards** – Users can **mint Esteem at** a gradually **increasing price**. It is also rewarded over time based on Stronghold deposits and rewarded immediately when buying Favor.
* **Burn Mechanism** – **Esteem** can be **burned to mint Favor**, providing **an opt-out** that doesn’t hurt the remaining holders.
* **Governance Utility** – **BetterBank is meant to** eventually **decentralize**, and if it successfully does so, **Esteem is** intended to function as the **governance token**, granting its owners voting rights. Successful **decentralization is not guaranteed**.

{% hint style="warning" %}
**Pulse and Arbitrum versions of Esteem operate independently from each other and are two separate, each providing the above features to its respective chain.  Pulse ESTEEM will only be applicable to the Pulse side of BetterBank and Arbitrum ESTEEM to BetterBank on Arbitrum .** 
{% endhint %}

#### **Favor  (Starting with $PDAIF, $PLSF, and $PLSXF ) – Synthetic Credit & Liquidity Engine**

Favor tokens are **BetterBank’s synthetic credit asset**, designed to power the lending and borrowing ecosystem. Unlike traditional algorithmic stablecoins, Favor is backed by a **seigniorage model that integrates directly with lending pools**, ensuring deep liquidity and stability.

* **Bought or Rewarded -** Favor tokens are **freely minted** over time to stakers of Esteem in the Groves, but can also be bought to **instantly increase borrowing capacity**, with **free Esteem** added in the deal.
* **Capital Efficient Credit System** – Favor replaces traditional fractional reserve banking models by acting as **on-chain collateral with actual reserve value and liquidation thresholds**.
* **Market-Driven Stability** – Favor’s supply expands based on real-time demand, accepting volatility in the Wildlands to stabilize yields in the Stronghold.
* **Utility in Borrowing & Staking** – Favor can be used as **collateral** for borrowing **when LP'd and deposited** in lending markets.

Both tokens **work** **in** **tandem** to create a **self-reinforcing economic loop**, where Favor fuels borrowing and liquidity, while Esteem governs the system’s expansion and economic balance.