# AVAX Token (/docs/primary-network/avax-token)
AVAX is the native utility token of Avalanche. It's a hard-capped, scarce asset that is used to pay for fees, secure the platform through staking, and provide a basic unit of account between the multiple Avalanche L1s created on Avalanche.
`1 nAVAX` is equal to `0.000000001 AVAX`. Use the [AVAX Unit Converter](/console/primary-network/unit-converter) to convert between different AVAX denominations.
## Utility
AVAX is a capped-supply (up to 720M) resource in the Avalanche ecosystem that's used to power the
network. AVAX is used to secure the ecosystem through staking and for day-to-day operations like
issuing transactions.
AVAX represents the weight that each node has in network decisions. No single actor owns
the Avalanche Network, so each validator in the network is given a proportional weight in the
network's decisions corresponding to the proportion of total stake that they own through proof
of stake (PoS).
Any entity trying to execute a transaction on Avalanche Primary Network pays a corresponding fee (commonly known as
"gas") to run it on the network. The fees used to execute a transaction on Avalanche is burned,
or permanently removed from circulating supply.
## Tokenomics
A fixed amount of 360M AVAX was minted at genesis, but a small amount of AVAX is constantly minted
as a reward to validators. The protocol rewards validators for good behavior by minting them AVAX
rewards at the end of their staking period. The minting process offsets the AVAX burned by
transactions fees. While AVAX is still far away from its supply cap, it will almost always remain an
inflationary asset.
Avalanche does not take away any portion of a validator's already staked tokens (commonly known as
"slashing") for negligent/malicious staking periods, however this behavior is disincentivized as
validators who attempt to do harm to the network would expend their node's computing resources
for no reward.
AVAX is minted as a staking reward when a validation period ends successfully. The amount is
computed by [`reward.Calculator`](https://github.com/ava-labs/avalanchego/blob/master/vms/platformvm/reward/calculator.go)
from four network parameters and three properties of the validation.
The minting rate scales linearly with how much of the minting period the validation covered:
$$
\text{MintingRate} = \text{MinConsumptionRate} + \left(\text{MaxConsumptionRate} - \text{MinConsumptionRate}\right) \times \frac{\text{StakingDuration}}{\text{MintingPeriod}}
$$
That rate is then applied to the staker's share of the remaining un-minted supply:
$$
\text{Reward} = \left(\text{SupplyCap} - \text{CurrentSupply}\right) \times \frac{\text{StakedAmount}}{\text{CurrentSupply}} \times \text{MintingRate} \times \frac{\text{StakingDuration}}{\text{MintingPeriod}}
$$
The result is capped at $\text{SupplyCap} - \text{CurrentSupply}$. That cap, together with the
$\left(\text{SupplyCap} - \text{CurrentSupply}\right)$ factor shrinking as supply grows, is what
guarantees AVAX never exceeds $720M$ tokens.
### Mainnet Parameters
Set in [`genesis/genesis_mainnet.go`](https://github.com/ava-labs/avalanchego/blob/master/genesis/genesis_mainnet.go):
| Parameter | Value | Raw |
|---|---|---|
| `MaxConsumptionRate` | 12% | `120000` |
| `MinConsumptionRate` | 10%, dropping to 7.5% (see below) | `100000` → `75000` |
| `MintingPeriod` | 365 days | `8760h` |
| `SupplyCap` | 720M AVAX | `720000000000000000` nAVAX |
Consumption rates are stored in millionths (`PercentDenominator` is `1000000`), so `120000` means
12%. All internal arithmetic is integer arithmetic on `big.Int`, with truncating division, so a
floating-point reimplementation can differ by a few nAVAX.
`SupplyCap` bounds what the P-Chain will ever **mint**. Its `CurrentSupply` counter tracks minted
rewards only: a staker's potential reward is added optimistically when the staker is added, and
deducted again if the reward turns out not to be earned. Nothing in that counter accounts for AVAX
burned as transaction fees, which is destroyed at the UTXO and account level without the counter
knowing about it. So the maximum supply that can ever circulate is 720M minus everything burned to
date, which is why exchanges and market trackers publish a figure below 720M and revise it downward
over time. Query the protocol's own number with
[`platform.getCurrentSupply`](/docs/rpcs/p-chain#platformgetcurrentsupply).
### Why Longer Staking Earns More
A validation covering the full minting period earns `MaxConsumptionRate`. A very short one earns
close to `MinConsumptionRate`:
| Staking duration | Minting rate before Helicon | Minting rate once ACP-285 is fully phased in |
|---|---|---|
| 48 hours (validator minimum) | 10.011% | 7.525% |
| 2 weeks (delegator minimum) | 10.077% | 7.673% |
| 1 year (maximum) | 12% | 12% |
So a one-year validation earned about 19.9% more per token than a 48-hour one before Helicon, rising
to about 59.5% once ACP-285 is fully phased in. This is what incentivizes stakers to commit for
longer periods. During the 90-day ramp the effective rate sits between the two columns.
[ACP-285](/docs/acps/285-reduce-minimum-consumption-rate), part of the
[Helicon](/docs/primary-network/helicon-upgrade) upgrade, reduces `MinConsumptionRate` from 10% to
7.5%. The reduction is not immediate: it ramps linearly over the 90 days following Helicon
activation, and the rate that applies to a given validation is selected from its **start time**.
`MaxConsumptionRate` is unchanged, so a full one-year validation is unaffected.
### Worked Example
A 2,000 AVAX validation, with a current supply of 460M AVAX, running for 48 hours:
$$
\text{MintingRate} = 0.10 + \left(0.12 - 0.10\right) \times \frac{48}{8760} = 0.1001096
$$
$$
\text{Reward} = \left(720M - 460M\right) \times \frac{2{,}000}{460M} \times 0.1001096 \times \frac{48}{8760} \approx 0.62\ \text{AVAX}
$$
Running the same inputs through the node's calculator returns `620095131` nAVAX. After the ACP-285
ramp completes, the same validation returns `466089567` nAVAX.