7. Deflationary Mechanisms

ELDR operates on a "Sound Money" principle. The supply is hard-capped, and deflationary mechanisms are embedded into the core protocol to ensure scarcity increases as network usage grows.

1. Transaction Burn (The "ELDR Tax")

Every transaction that occurs on the ELDR network triggers a burn to reduce supply permanently.

• Transaction Fee Burn: 0.5% of every ELDR transaction is permanently removed from supply.
• Marketplace Activity: A portion of trading volume on the ELDR Marketplace is used to buy and burn ELDR.

2. Unstaking Penalties

To protect the system from sudden liquidity shocks, early unstaking triggers a penalty.

• Early Exit Fee: Unstaking before the lock-up period ends incurs a penalty fee.
• Burn Mechanism: 100% of these penalty fees are immediately burned, reducing the total supply.

3. SDK Licensing Burn

Game developers pay licensing fees to access advanced SDK features.

• Licensing Revenue: Fees paid by enterprise studios for white-label solutions are converted to ELDR and burned quarterly.

4. Supply Shock Halving

Similar to Bitcoin, the emission rate of ELDR rewards for liquidity mining halves every 24 months, creating a predictable supply shock that historically correlates with value appreciation.