# Buy & Burn Tokens ### πŸ”₯ Buy & Burn Token Mechanism The **Buy & Burn Mechanism** is a core deflationary feature of the protocol, designed to continuously reduce the circulating supply of the project’s token as ecosystem activity grows.\ By tying token burns directly to trading volume and NFT market activity, the system creates **real, organic demand** while aligning incentives for long-term holders. #### βš™οΈ How It Works 1. **Tax Collection:** * Whenever a trade involving the token occurs, the **base token tax** (e.g., 6%) is applied. * From this collected tax, **a % is used for NFT buy/resell operations**, and **% is reserved specifically for buy-and-burn events**. * Additionally, profits from the **1.2Γ— NFT resale multiplier** feed back into the buy-and-burn loop. 2. **Automated Token Purchase:** * The allocated portion of the tax is routed automatically to **designated liquidity pool** * The system executes **market-buy orders** for the target token β€” either the project’s native SST-powered token or an external linked token. 3. **Permanent Token Removal (Burn):** * The purchased tokens are immediately sent to a **burn address** (a verifiable, non-recoverable wallet). * Once burned, these tokens are **permanently removed from circulation**, reducing the total supply. 4. **Linked Token Option:** * If the project already has a native token in circulation, founders can configure SST to allocate a portion of the volume to buy and burn **their existing token**. * This creates a **cross-protocol deflationary loop**, adding long-term support to pre-existing token ecosystems. *** #### πŸ“ˆ Example Flow (Base Token Tax = 6%) * **80%** β†’ Used to buy NFTs β†’ Resell at **1.2Γ—** β†’ Profits routed to buy & burn. * **8%** β†’ Directly used to buy & burn the token. * Portion of resale profits and royalties can also contribute to the burn cycle. *** #### 🌟 Benefits of the Buy & Burn Mechanism * **Deflationary Pressure:**\ With every trade and NFT flip, a portion of tokens is permanently removed, gradually lowering circulating supply. * **Increased Demand:**\ Automated market purchases create consistent buy pressure on the token, counteracting sell-side liquidity. * **Price Support:**\ The mechanism provides a self-sustaining demand loop that can help stabilise or increase token value over time. * **Cross-Ecosystem Synergy:**\ For projects linking an existing token, SST acts as a **liquidity engine**, directly boosting the utility and scarcity of that token. * **Transparency:**\ All burn events are **verifiable on-chain**, allowing the community to track the exact amount of tokens removed from circulation. *** #### πŸ”— Continuous Cycle 1. **Trades Occur β†’ Tax Collected** 2. **Tax Allocated β†’ NFT Buy/Resell & Direct Burn** 3. **Profits β†’ Buy & Burn Loop** 4. **Reduced Supply β†’ Supports Token Value** 5. **More Trading Activity β†’ More Burns** This creates a **self-reinforcing loop**, where ecosystem growth directly translates into token scarcity and potential value appreciation. --- # Agent Instructions: Querying This Documentation If you need additional information that is not directly available in this page, you can query the documentation dynamically by asking a question. Perform an HTTP GET request on the current page URL with the `ask` query parameter: ``` GET https://wp.gotmlabz.io/token-launcher/buy-and-burn-tokens.md?ask= ``` The question should be specific, self-contained, and written in natural language. The response will contain a direct answer to the question and relevant excerpts and sources from the documentation. Use this mechanism when the answer is not explicitly present in the current page, you need clarification or additional context, or you want to retrieve related documentation sections.