Hyperdeflation and Elasticity

Token Dynamics: Hyperdeflationary Mechanism

At the inception of the BMONK protocol, 330 million BMONK tokens are minted. A key feature of the protocol is a fixed 6% tax applied to every BMONK token transaction. This tax serves two main purposes: supporting the protocol's sustainability and reducing the total token supply over time.

This mechanism can be represented as:

{Tax Amount} = 6% X {Transaction Amount}

Token Burn Mechanism

One-third of the tax amount is allocated to a token burn event. This process removes a portion of tokens from circulation, effectively reducing the overall supply. The amount of tokens burned can be expressed as:

{Token Burned} =⅓ {Tax Amount}

This method systematically reduces the token supply, creating deflationary pressure that dynamically impacts the circulating tokens.

Elastic Supply Model

With each transaction, token burns lead to a continuous reduction in the total BMONK token supply. When the supply reaches a threshold of 33 million tokens, a significant event is triggered: the protocol halts, a Relaunch event occurs, and a Season concludes. After the Relaunch, the total token supply is reset to 330 million tokens for the next Season.

The Relaunch mechanism is defined as:

{Relaunch Trigger} ={Total Supply reaches 33 million tokens} { or } { 365 days have passed since inception}

Elasticity in Action

The BMONK protocol’s hyperdeflationary nature, combined with its elastic supply model, creates a perpetually evolving ecosystem. This unique blend aims to tackle issues related to token sustainability, scarcity, and value growth.