> For the complete documentation index, see [llms.txt](https://docs.pots.money/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://docs.pots.money/building-pots/pbm.md). # PBM #### What is PBM? The POTS Bid Module (PBM) is the bridge between Pots Money and Pots Market. It is the mechanism through which protocol revenue from IBS is converted into $POTS governance tokens — distributed to the community through a structured, 500-day auction process. {% hint style="success" %} 💡 One Sentence PBM transforms IBS protocol revenue into $POTS governance rights — not through a sale, but through a transparent, on-chain auction that rewards long-term participants. {% endhint %} #### How PBM Works: The Full Flow **Step 1 — Revenue Collection** Every time a user unlocks their IBS stake, the Co-Building Fund Tax (30% for immediate unlock, 10% for 30-day linear unlock) is collected in USDT and automatically converted to BTCB, stored in the PBM Treasury. {% hint style="success" %} 🔐 Why BTCB? BTCB (Bitcoin BEP-20) serves as the hard reserve asset of the PBM Treasury — a non-inflationary, globally recognized store of value that anchors the treasury against market volatility. {% endhint %} **Step 2 — Scheduled Injection** Each settlement cycle's revenue is divided into 30 equal portions and injected daily into the POTS/BTCB liquidity pool over 30 days. This prevents large, destabilizing liquidity events and creates a steady, predictable flow of capital into the pool.
{% hint style="success" %} 🏛️ The Long-Term Role of $POTS Once fully distributed, $POTS becomes the governance token of the entire POTS ecosystem — including Pots Market, Pots Money, and all future protocol expansions. It is the equity layer of the POTS universe. {% endhint %} **Step 3 — The 500-Day Deflation Auction** Once POTS tokens enter the liquidity pool, the 500-day deflation schedule begins. Every day, 0.5% of the actual pool balance that day is removed and allocated according to a shifting ratio. is a dynamic, path-dependent process — not a fixed schedule. The pool balance changes daily due to two opposing forces: * Deflation (reduces pool): 0.5% of current pool balance is removed each day. * Sell-ins (increases pool): When IBS stakers receive redistributed POTS and choose to sell it back into the pool, the pool balance increases — which in turn increases the absolute size of the next day's deflation. $$S\_{pool}(t+1) = S\_{pool}(t) - \underbrace{S\_{pool}(t) \times 0.5%}*{\text{deflation}} + \underbrace{\text{Sell-ins}(t)}*{\text{stakers returning POTS}}$$ The deflation is then split according to the day's ratio: $$\text{Burn}(t) = S\_{pool}(t) \times 0.5% \times \left(0.80 - \frac{0.60 \cdot t}{500}\right)$$ $$\text{Redistribution}(t) = S\_{pool}(t) \times 0.5% \times \left(0.20 + \frac{0.60 \cdot t}{500}\right)$$ | Phase | Day Range | Burn % | Redistribution to IBS Stakers % | | ----------- | --------- | ------ | ------------------------------- | | Early Phase | Day 0 | 80% | 20% | | Mid Phase | Day 250 | 50% | 50% | | Late Phase | Day 500 | 20% | 80% |
{% hint style="success" %} 📐 The Dynamic Effect In a pure deflation scenario (no sell-ins), the pool would reach approximately 8.2% of its initial size after 500 days. In practice, sell-ins from stakers continuously replenish the pool — extending the auction duration and increasing the total POTS distributed to stakers over time. The more active the staker community, the more POTS flows back into the pool, and the larger each day's redistribution becomes.This creates a self-reinforcing redistribution flywheel: active stakers receive more POTS → some sell back → pool grows → next day's redistribution is larger → more POTS for active stakers. {% endhint %} #### Who Can Participate? The PBM auction is not a public sale. Ordinary users cannot purchase POTS directly from the pool.
Participant TypeCan Buy POTS?Can Receive Redistributed POTS?Can Sell POTS?
General Users❌ No❌ No✅ Yes (if received via redistribution)
IBS Stakers❌ No✅ Yes (daily redistribution)✅ Yes
IBS stakers receive redistributed POTS daily. They can choose to hold for governance rights, or sell back into the POTS/BTCB pool to receive BTCB — creating a continuous, organic price discovery mechanism. #### Step 4 — Liquidity Migration & Decentralization When the 500-day auction concludes, the protocol undergoes a permanent, irreversible transition: 1. Liquidity Migration: Protocol-owned POTS/BTCB liquidity is migrated to a standard DEX pool. 2. Tax Removal: All buy/sell taxes on POTS are permanently removed. 3. Whitelist Removal: All transfer restrictions are lifted. 4. Ownership Renunciation: The contract owner key is discarded. No entity can ever modify the POTS contract again. {% hint style="success" %} 🔓 This is the moment POTS becomes fully decentralized. From this point forward, $POTS is a free-floating governance token — owned by the community, governed by the DAO, and used across the full POTS ecosystem. {% endhint %} #### PBM vs IBS: Two Different Assets It is important to understand that $POTS and $IBS are fundamentally different assets with different roles:
$IBS$POTS
TypeAlgorithmic monetary tokenGovernance token
SupplyAlgorithmic (expands/contracts)Fixed, deflationary
Primary UseBonding, staking, liquidityGovernance, prediction market incentives
BackingLP + RBS + Safety TreasuryProtocol revenue + BTCB treasury
DistributionBond purchases, algorithmic emissionPBM auction (500 days)
Post-DistributionPerpetual operationFree-floating DAO governance
{% hint style="success" %} 🏛️ The Long-Term Role of $POTS Once fully distributed, $POTS becomes the governance token of the entire POTS ecosystem — including Pots Market, Pots Money, and all future protocol expansions. It is the equity layer of the POTS universe. {% endhint %}