7. Deflationary Mechanisms

VEX 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 "VEX Tax")

Every transaction that occurs on the VEX network triggers a burn.

• Transfer Fee Burn: 0.5% of every VEX transfer is permanently removed from supply.
• Marketplace Burn: 1% of all NFT trading volume on the VEX Marketplace is used to buy and burn VEX.

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 10% penalty.
• 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 VEX and burned quarterly.

4. Supply Shock Halving

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