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

# Deflationary Mechanism

<figure><img src="/files/O9WEN83DhVj5dLcwNzCY" alt=""><figcaption></figcaption></figure>

To maintain a sustainable and deflationary ecosystem, $HIS token incorporates several burn mechanisms that ensure a continuous reduction in token supply. These mechanisms are designed to balance token rewards with long-term scarcity, creating value for holders and active participants in the ecosystem.

| Mechanism                      | Burn Percentage | Fequency   |
| ------------------------------ | --------------- | ---------- |
| **Game Reward Claims**         | 4%              | Per Claim  |
| **NFT Leasing (Rent-to-Earn)** | 4%              | Per Rental |
| **NFT Marketplace Royalties**  | 30%             | Weekly     |
| **Liquidity Pool Revenue**     | 30%             | Weekly     |

**1. Burn on Claim (Game Rewards)**

* When players claim their earned $HIS or $SOL tokens from in-game activities, &#x34;**% of the claimed amount** is automatically burned.
  * **Example:** If a player claims 1,000 $HIS, 40 $HIS will be permanently burned.
* This incentivizes players to strategize their claiming frequency while introducing a deflationary pressure on the token supply.

**2. Burn on NFT Leasing (Rent-to-Earn)**

* When NFT owners lease their NFTs to other players for passive income, &#x34;**% of the received token rewards** from leasing are automatically burned.
  * **Example:** If an NFT owner earns 500 $HIS from leasing their NFT, 20 $HIS will be burned.
* This ensures that Rent-to-Earn mechanics contribute to the overall deflationary ecosystem, balancing the passive rewards for NFT holders.

**3. Marketplace Royalties & Liquidity Pool Revenue**

* Histoxel’s NFT marketplace generates royalty income from secondary sales. **30% of the royalty revenue collected in $HIS tokens** will be regularly burned, further reducing the circulating supply.
* Additionally, **30% of liquidity pool revenue generated from $HIS token trading fees** will also be burned on a regular basis.
  * These burns will occur monthly, ensuring a predictable and ongoing reduction in token supply.

**4. Long-Term Impact**

* By incorporating these burn mechanisms, Histoxel ensures:
  * A consistent deflationary effect, increasing the value of $HIS tokens over time.
  * A balance between rewarding active players and holders while controlling token inflation.
  * Greater long-term incentive for users to participate in both the game and marketplace activities


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