Protection Mechanism

TaxFarming implements a robust protection mechanism to safeguard both buyers and token creators. This system is designed to ensure fair compensation for creators while providing a secure investment environment for buyers.

20% Supply Clog

Purpose: The 20% supply clog is implemented to protect buyers and guarantee that creators are fairly compensated. By clogging a portion of the token's supply, we create a buffer that ensures the creator can recover their initial investment if certain conditions are met.
How It Works: When a token is deployed on the platform, 20% of its total supply is "clogged" or reserved. This reserved portion acts as a refund fund for the creator. If the token performs well, generating sufficient fees to cover at least 1 ETH (the initial liquidity provided by the creator), the token remains in a 5/5 tax mode until the clog is fully exhausted. Once the clog is cleared, the tax rate on the token is reduced to 0/0, providing a more favorable trading environment for buyers.

Liquidity Management

Successful Token Performance: If the token generates enough fees to reimburse the creator's initial liquidity (1 ETH), the token continues to operate in a 5/5 tax mode. This mode remains active until the clogged supply is fully utilized, ensuring the creator's compensation. After the clog is cleared, the tax rate is automatically reduced to 0/0, benefiting ongoing traders and supporting the token's long-term viability.

Underperforming Token: If the token does not generate sufficient fees within 24 hours to cover the initial 1 ETH liquidity, the clogged liquidity is withdrawn and returned to the creator’s wallet. This ensures that the creator is not left with financial losses if the token fails to gain traction, allowing them to potentially redeploy the token or invest in new opportunities.
Additionally, when a token underperforms, the creator is refunded with their initial LP, but the fees generated by the token are used to purchase $FARM and burn it, thereby reducing the supply of $FARM.

PreviousToken Creation and Deployment NextEconomic Model

Last updated 28 days ago

Protection Mechanism

20% Supply Clog

Purpose: The 20% supply clog is implemented to protect buyers and guarantee that creators are fairly compensated. By clogging a portion of the token's supply, we create a buffer that ensures the creator can recover their initial investment if certain conditions are met.
How It Works: When a token is deployed on the platform, 20% of its total supply is "clogged" or reserved. This reserved portion acts as a refund fund for the creator. If the token performs well, generating sufficient fees to cover at least 1 ETH (the initial liquidity provided by the creator), the token remains in a 5/5 tax mode until the clog is fully exhausted. Once the clog is cleared, the tax rate on the token is reduced to 0/0, providing a more favorable trading environment for buyers.

Liquidity Management

Successful Token Performance: If the token generates enough fees to reimburse the creator's initial liquidity (1 ETH), the token continues to operate in a 5/5 tax mode. This mode remains active until the clogged supply is fully utilized, ensuring the creator's compensation. After the clog is cleared, the tax rate is automatically reduced to 0/0, benefiting ongoing traders and supporting the token's long-term viability.

Underperforming Token: If the token does not generate sufficient fees within 24 hours to cover the initial 1 ETH liquidity, the clogged liquidity is withdrawn and returned to the creator’s wallet. This ensures that the creator is not left with financial losses if the token fails to gain traction, allowing them to potentially redeploy the token or invest in new opportunities.
Additionally, when a token underperforms, the creator is refunded with their initial LP, but the fees generated by the token are used to purchase $FARM and burn it, thereby reducing the supply of $FARM.

PreviousToken Creation and Deployment NextEconomic Model

Last updated 28 days ago