> For the complete documentation index, see [llms.txt](https://icecreamfinancial.gitbook.io/sundae-finance/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://icecreamfinancial.gitbook.io/sundae-finance/understanding-the-protocol/tokens.md).

# Tokens

Get a better understanding of our tokens

## FUDGE - 1:1 Pegged Token with $DAI

![Governance Token](https://1714307995-files.gitbook.io/~/files/v0/b/gitbook-x-prod.appspot.com/o/spaces%2Fkm62ePay5naXrUcT3ohT%2Fuploads%2FjPibJVZAAX1i5Xvw3Lz8%2FFUDGE.png?alt=media\&token=f4798e61-60ad-47c1-9a28-d345a70be9aa)

> <mark style="background-color:orange;">Contract Address: 0xD9FF12172803c072a36785DeFea1Aa981A6A0C18</mark>

FUDGE token is designed to be pegged to the Avalanche network stable coin $DAI. The built-in stability mechanism in the protocol aims to maintain Fudge's peg to 1 $DAI token in the long run.&#x20;

{% hint style="warning" %}
Note that FUDGE **actively pegs via the algorithm**, it **does not mean** it will be valued at 1 $DAI at all times as it is not collaterized . FUDGE is not to be confused for a crypto or fiat-backed stable coin.\
\ <mark style="color:red;">All $FUDGE token transactions (selling/buying $FUDGE) are subject to a</mark> <mark style="color:red;"></mark><mark style="color:red;">**tax**</mark> <mark style="color:red;"></mark><mark style="color:red;">at x rate (currently 2% but subject to change according to what's best for the protocol) that will be deposited directly into the protocol's treasury.</mark>\
\ <mark style="color:red;">Warning to all bots: If you mess with our protocol using a frontrunning bot to sandwich our legit users, we will black list your wallet and you won't be able to sell/trade your tokens.</mark>&#x20;
{% endhint %}

## STRAW - Strawberry Shares

![Share Token](https://1714307995-files.gitbook.io/~/files/v0/b/gitbook-x-prod.appspot.com/o/spaces%2Fkm62ePay5naXrUcT3ohT%2Fuploads%2FlLRrVcoxySX7QCkGRIsU%2FSTRAW.png?alt=media\&token=ef10ea21-d1e0-484c-9ab1-ff5227376796)

> <mark style="background-color:purple;">Contract Address: 0xf8D0C6c3ddC03F43A0687847f2b34bfd6941C2A2</mark>

Strawberry Shares (STRAW) are one of the ways to measure the value of the Sundae Protocol and shareholder trust in its ability to maintain FUDGE close to peg. During epoch expansions the protocol mints FUDGE and distributes it proportionally to all STRAW holders who have staked their tokens in the boardroom.

STRAW holders have voting rights (governance) on proposals to improve the protocol and future use cases within the Sundae finance ecosystem.

## CARAML - Caramel Bonds

![Bond Token](https://1714307995-files.gitbook.io/~/files/v0/b/gitbook-x-prod.appspot.com/o/spaces%2Fkm62ePay5naXrUcT3ohT%2Fuploads%2FfBcwjvFmovENH3C7uvUF%2Fcaraml.png?alt=media\&token=fb03f578-7eb5-492a-b149-c49901c1454d)

> <mark style="background-color:blue;">Contract Address: 0x173FC8B3799a957CF4d29389F6296e238f9C07AC</mark>

FUDGE Bonds (CARAML) main job is to help incentivize changes in FUDGE supply during an epoch contraction period. When the TWAP (Time Weighted Average Price) of FUDGE falls below 1 DAI,  CARAML are issued and can be bought with FUDGE at the current price. Exchanging FUDGE for CARAML burns FUDGE tokens, taking them out of circulation (deflation) and helping to get the price back up to 1 DAI. These CARAML can be redeemed for FUDGE when the price is above peg in the future, plus an extra incentive for the longer they are held above peg. This amounts to inflation and sell pressure for FUDGE when it is above peg, helping to push it back toward 1 DAI.

{% hint style="info" %}
Contrary to early algorithmic protocols, CARAMLs do not have expiration dates.&#x20;
{% endhint %}

All holders are able to redeem their CARAML for FUDGE tokens as long as the Treasury has a positive FUDGE balance, which typically happens when the protocol is in epoch expansion periods.