🔥Deflationary Mechanics

To manage the supply of DSP, we've introduced several strategies, including a hardcap and deflationary mechanisms.

Buy back & burn

A portion of our protocol's profits is allocated for repurchasing and subsequently destroying DSP. This approach aims to consistently generate demand for DSP.

Converting YUM to DSP

When YUM is converted to DSP, the conversion ratio depends on the vesting period. If the vesting period is less than the maximum, the YUM to DSP ratio decreases, possibly going as low as 1:0.5. Any excess DSP resulting from this process is automatically destroyed.

For example, converting 1000 YUM with a minimum 15-day vesting period results in a 1:0.5 ratio. The user receives 500 DSP, and the remaining 500 DSP is burned.

YUM deallocations

A tax is imposed when withdrawing YUM from a Plugin. This tax varies depending on the contract but is typically around 0.5%. The DSP amount equivalent to this tax is automatically burned.