Page cover

Burn Mechanism

Burn Mechanism

Overview

The $XIO Burn Mechanism is a critical component of the tokenomics model designed to reduce the circulating supply of $XIO tokens over time, thus increasing scarcity and potentially driving up the value of the token. The burn process leverages profits generated from various platform activities, ensuring long-term sustainability and benefits for $XIO holders.

Key Fact:

Every quarter, the platform uses 1/3rd of its trading rebate profits, alongside additional revenue from other sources, to buy back and burn $XIO tokens, reducing the total supply.

How It Works

The burn mechanism operates on a quarterly cycle and involves using a portion of the platform’s profits to purchase $XIO tokens from the market and burn them. This process will continue until 50% of the total supply has been burned.

Revenue Sources for Burns:

  1. Trading Fee Rebates: A third of the platform's trading fee rebate profits are allocated towards token burns.

  2. Swaps & DeFi Automation Fees: Profits from swaps and DeFi automation trigger fees are also used for buying back $XIO.

  3. DEX Fees: Fees generated from the proprietary XIO decentralized exchange (DEX) contribute to the buyback and burn process.

  4. Copy Trading Fees: Fees earned from the automated copy trading system are also part of the burn allocation.

Quarterly Burn Cycle

The burn mechanism follows a structured quarterly process:

  1. Profit Calculation: The platform calculates the total trading rebate profits and additional fee income at the end of each quarter.

  2. Burn Allocation: One-third of the total profit is earmarked for token buybacks.

  3. Token Buyback: $XIO tokens are purchased from the open market using the allocated funds.

  4. Burn Event: The purchased tokens are permanently removed from circulation via a burn, reducing the total supply.

Note: This process will repeat every quarter until the platform has burned 50% of the original total supply of $XIO tokens.

Impact on Token Value

As the supply of $XIO decreases through regular burns, the token’s scarcity increases. This deflationary mechanism can create upward pressure on the token’s value over time, benefiting long-term holders and active participants in the ecosystem.

“By reducing the total supply through systematic burns, we aim to create a more sustainable and valuable token economy for all $XIO holders.” — XIO Team

Example Burn Calculation

Based on the platform’s projected monthly trading volume of $18 billion and a rebate rate of 0.01225%, the estimated quarterly burn would be:

  • Monthly Rebate Profits: $2,205,000 = $18b * 0.01225%

  • Monthly Burn Pool: $734,296 = 33.33% of $2,205,000

  • Estimated Quarterly Burn: $2.94 million in $XIO tokens bought back and burned every quarter.

Frequently Asked Questions

1. Why is the burn mechanism important for $XIO holders?

The burn mechanism reduces the total supply of $XIO tokens over time, creating scarcity, which can increase the value of the remaining tokens. This benefits long-term holders and incentivizes continued participation in the ecosystem.

2. How long will the burn mechanism be active?

The burn mechanism will continue until 50% of the total supply of $XIO has been burned. This gradual reduction in supply ensures that the tokenomics remain sustainable.

3. What happens if the platform generates more revenue than expected?

If the platform's revenue exceeds projections, the amount of $XIO burned could increase, accelerating the reduction in circulating supply and potentially driving the token's value higher.

Last updated