# VAPE manufacturing & node-powered infrastructure

We’ve long said that nodes will always remain a critical component in our ecosystem, and with node-powered manufacturing we’ll be excitedly expanding the role, utility, and value proposition of nodes beyond what we shared in our node evolution roadmap. Manufacturing is all new and never shared… welcome to the exciting future of nodes and transformative DeFi mechanics at VaporFi.

While 10% of the initial supply of VAPE will be emitted and awarded directly through the Genesis Pool (2%) and Liquid Staking (8%) as VAPE tokens, the remaining 90% will be earned and then need to be minted using a process that we’re calling “Node-powered Manufacturing”.

Let’s look at some of the high-level mechanics of this process and how it impacts nodes, VAPE, and more! How does manufacturing work?

* A new experience is created on VaporDEX, for VAPE manufacturing
* VaporFi Labs creates public infrastructure for manufacturing. A refinery, a processing plant, and a tokenizer
* The refinery converts Crude VAPE into Refined VAPE
* The processing plant converts Refined VAPE into Pure VAPE
* The tokenizer allows you to take Pure VAPE and use it to mint a fully transferable VAPE token
* Node owners can choose to stake their node(s) on any public infrastructure to provide power to the building
* Nodes will receive expanded attributes beyond their TVL, which will determine how effective they are at powering each of the three types of buildings. Some may be great at powering the refinery, but terrible at powering the tokenizer. Others may be more evenly balanced
* As the community earns VAPE materials, they will deposit them into the appropriate building for manufacturing
* With each deposit of materials, the depositor will be charged a small USDC fee to use the building
* The efficiency of nodes staked on each building providing it power, will determine how long it takes for the materials to be manufactured, and what percent of the materials fail to manufacture and need to be re-deposited

**IMPORTANT:** These small USDC fees as well as the impact of staked nodes on a building function as a natural supply manager. If VAPE is not profitable to manufacture, new supply will slow or halt altogether. And if nodes are not staked strategically across all buildings, there could be inefficiencies in the manufacturing chain that cause new supply to slow. In addition to manufacturing functioning as a natural supply manager — it will also function as a source of revenue

How does manufacturing generate revenue?

* Every time materials are deposited into a building, a USDC service fee is charged to use the building
* 20% of the fee is sent to the VAPE-USDC staking reward pool (helping increase the demand/value of VAPE)
* 20% of the fee is also sent to the Passport Reward Pool (adding value to nodes)
* 20% of the fee is sent to the VaporFi Labs treasury to support daily operations and growth
* 40% of the fee is distributed to the nodes staked on the building (adding more value to nodes)

Here’s how the manufacturing process looks, from start to finish:

1. John earns 10 Crude VAPE from Stratosphere
2. He deposits 10 Crude VAPE into the Refinery, and is charged a USDC fee
3. 8 of his Crude VAPE is successfully refined into Refined VAPE, 2 fail to refine due to poorly staked nodes
4. John can re-deposit the 2 Crude VAPE that failed to refine, or he can wait until it becomes more efficient
5. John now deposits his 8 Refined VAPE into the Processing Plant, and is charged a USDC fee
6. 7 of his 8 Refined VAPE are successfully processed into Pure VAPE, 1 fails to process and remains Refined VAPE
7. John can re-deposit the 1 Refined VAPE to try to process it again, or he can wait
8. John takes his 7 Pure VAPE and deposits them into the Tokenizer, and is charged a USDC fee
9. 5 of his 7 Pure VAPE successfully convert and mint a VAPE token. He now has 5 fully transferable VAPE tokens
10. John can re-deposit the 2 Pure VAPE that failed to convert now, or wait until later
11. John sells, stakes, or holds his 5 VAPE tokens — and continues to manufacture more

Node-powered manufacturing is a concept that has never been seen before but plays a very important role in the economy of VAPE, VPND, Nodes, Unchained, and more. We’ll walk through this in greater detail in an upcoming article diving head-first into the mechanics and details of manufacturing.

We anticipate that there will be some unique strategies employed by the community — individually and collaboratively when it comes to manufacturing. So, to help get the conversation started, let’s look at some questions that we expect will be frequently asked.
