Burn Mechanism

Solistic Finance implements a dynamic token burn mechanism to manage the SLS token supply. A portion of the protocol's fee revenue is allocated monthly to repurchase and permanently remove SLS tokens from circulation.

The burn rate is structured in progressive tiers, correlating with the protocol's fee revenue. As the revenue increases, a higher percentage of tokens are burned, creating a self-reinforcing deflationary mechanism.

The specific burn rate tiers are given in the table below, providing transparency and predictability to this tokenomic feature.

The Burn Rate resets on 1st January every year.

Total Annual Revenue	% Burn Rate
$0-10,000,000	5
$10,000,000-50,000,000	10
$50,000,000-100,000,000	15
$100,000,000-250,000,000	20
$250,000,000-500,000,000	25
$500,000,000-$1,000,000,000	30
$1,000,000,000-$2,000,000,000	35
$2,000,000,000+	50

Here are two examples illustrating Solistic Finance's tiered token burn mechanism based on annual revenue:

Example 1: Annual Revenue of $75,000,000

Tier breakdown:

1. $0-10,000,000 (5%): $10,000,000 * 5% = $500,000

2. $10,000,000-50,000,000 (10%): $40,000,000 * 10% = $4,000,000

3. $50,000,000-75,000,000 (15%): $25,000,000 * 15% = $3,750,000

Total burn amount: $500,000 + $4,000,000 + $3,750,000 = $8,250,000

In this scenario, Solistic Finance would repurchase and permanently remove $8,250,000 worth of SLS tokens from circulation.

Example 2: Annual Revenue of $650,000,000

Tier breakdown:

1. $0-10,000,000 (5%): $10,000,000 * 5% = $500,000

2. $10,000,000-50,000,000 (10%): $40,000,000 * 10% = $4,000,000

3. $50,000,000-100,000,000 (15%): $50,000,000 * 15% = $7,500,000

4. $100,000,000-250,000,000 (20%): $150,000,000 * 20% = $30,000,000

5. $250,000,000-500,000,000 (25%): $250,000,000 * 25% = $62,500,000

6. $500,000,000-650,000,000 (30%): $150,000,000 * 30% = $45,000,000

Total burn amount: $500,000 + $4,000,000 + $7,500,000 + $30,000,000 + $62,500,000 + $45,000,000 = $149,500,000

In this case, Solistic Finance would buy back and burn $149,500,000 worth of SLS tokens.

These examples demonstrate how the tiered burn rate structure progressively increases the percentage of tokens burned as the protocol's revenue grows, enhancing the deflationary effect on the SLS token supply.​​​​​​​​​​​​​​​​