> ## Documentation Index
> Fetch the complete documentation index at: https://docs.tulipai.app/llms.txt
> Use this file to discover all available pages before exploring further.

# Model credits

> Understand Tulip's fixed-supply ERC-20 inference credits and their market value.

A model credit is the canonical ERC-20 asset for one pinned model market. It is both a freely transferable market asset and the unit used to price and settle inference.

<Info>
  Model credits are not generic launchpad tokens. Tulip does not issue a Tulip token because the protocol does not create or own an AI model that could define a legitimate Tulip model credit. Read [Version 1 scope](/concepts/version-one#why-tulip-did-not-launch-a-tulip-token).
</Info>

<Warning>
  A model credit can trade without an active provider. Trading signals demand; it does not guarantee current inference availability. Until an eligible provider offer exists, the credit cannot be used for inference.
</Warning>

## Credit properties

* **Fixed supply.** The full supply is minted once during launch. No post-launch mint authority exists.
* **Model-bound.** The token stores its immutable `MODEL_ID`.
* **Transferable.** Credits can move between wallets, pools, permits, and provider payout addresses.
* **Permit-enabled.** The token implements ERC-20 Permit for signature-based approvals.
* **Provider-neutral.** Every provider serving the model charges the same canonical credit, even when tariffs differ.

## What gives a credit utility

Providers publish input, output, minimum, and wake charges denominated in credits. A user deposits credits into an inference permit. After a request, the escrow transfers the charged credits to the provider and fee recipients.

Providers receive credits rather than USDG. They can hold them, transfer them, or sell them through the model's credit/USDG pool.

## Market price and inference price

These are different quantities:

* **Market price** is the current USDG price of one credit in the Uniswap v4 pool.
* **Inference tariff** is the number of credits a provider charges for usage.

The effective USDG cost of inference changes when either quantity changes.

<Warning>
  A model credit is not a stablecoin, debt instrument, ownership interest, or guaranteed claim on future service. Its market value can move sharply, and a model may have no available provider.
</Warning>

## Supply distribution

At launch, the factory sends the configured credit supply into the one-sided liquidity position. Rounding dust, if any, is transferred to the immutable locker. The launcher does not receive an unlocked allocation from the launch transaction.