Deflationary mechanisms

In addition to the hardcap set on CLDX, we also implemented some deflationary mechanisms in order to reduce the total supply.

Buy back & burn

A share of the protocol earnings is dedicated to buy back & burn CLDX, in order to apply a continuous buying pressure on it.

ECO redeems

When concerting ECO to CLDX, if the vesting duration isn't the maximum, the ECO:CLDX ratio will be lower than 1:1, down to a minimum of 1:0.5. All of the CLDX excess will automatically be burned.

For instance, if a user redeems 1000 ECO with the minimal 15 days vesting duration, he will obtain a 1:0.5 ratio, and receive 500 CLDX in the end.

That means a total of 1000 - 500 = 500 CLDX will be burned during the process.

ECO deallocations

When deallocating ECO from a Pool, a deallocation tax is applied. It can vary between contracts, but will usually be of 0.5% - 1%.

The corresponding CLDX amount will automatically be burned.