> For the complete documentation index, see [llms.txt](https://unira.gitbook.io/documentation/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://unira.gitbook.io/documentation/unira-defi/hyperdeflation-and-elasticity.md).

# Hyperdeflation and Elasticity

UNIRA Token - A Hyperdeflationary and Elastic Supply Protocol

### **Token Dynamics: Hyperdeflationary Mechanism**

At the genesis of the UNIRA protocol, 1 billion UNIRA tokens are minted. A pivotal aspect of the protocol lies in the application of a fixed 6% tax on every UNIRA token transaction. This tax serves a dual purpose: to contribute to the sustainability of the protocol and to induce a continuous reduction in the total token supply.

This mechanism can be represented as:

**Tax Amount** = 6% \* Transaction Amount

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### **Token Burn Mechanism**

Of the tax amount, 1/3rd is immediately allocated to a token burn event. This entails the removal of a portion of tokens from circulation, thereby decreasing the overall supply. The burned token amount can be stated as:

**Token Burned** = (1/3) \* Tax Amount

This approach systematically curtails the token supply, introducing a deflationary pressure that dynamically impacts the circulating tokens.

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### **Elastic Supply Model**

As the token burns progress with each transaction, the total UNIRA token supply experiences a continuous reduction. When the token supply reaches the predefined threshold of 100 million tokens, a major event is triggered: the protocol halts, a Relaunch event ensues, and one Season concludes. Following the Relaunch, the total token supply is reset to 1 billion tokens for the subsequent Season.

The Relaunch mechanism is expressed as:

**Relaunch Trigger** = \[Total Supply reaches 100 million tokens]  Or \[365 days has passed from genesis]

<figure><img src="https://3533053436-files.gitbook.io/~/files/v0/b/gitbook-x-prod.appspot.com/o/spaces%2FMgifGp9ACjjCD9aNEvVt%2Fuploads%2FcB79dQLxDcDtfxEb7s0W%2Fhyperdeflation%20and%20elastic.png?alt=media&amp;token=505594c7-6c55-4265-bd51-f7f190e5baaf" alt=""><figcaption></figcaption></figure>

### **Elasticity in Action**

The UNIRA protocol's hyperdeflationary nature, combined with the elastic supply model, creates an ever-evolving ecosystem. This unique fusion aims to address concerns related to token sustainability, scarcity, and value appreciation.