> For the complete documentation index, see [llms.txt](https://cloudaxhq.gitbook.io/cloudax-whitepaper/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://cloudaxhq.gitbook.io/cloudax-whitepaper/token-and-governance/deflationary-mechanisms.md).

# 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 href="#buy-back-and-burn" id="buy-back-and-burn"></a>

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 <a href="#xgrail-redeems" id="xgrail-redeems"></a>

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.&#x20;

{% hint style="warning" %}
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.
{% endhint %}

#### ECO deallocations <a href="#xgrail-deallocations" id="xgrail-deallocations"></a>

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.