Burn Program & Deflation Model
As the protocol generates real yield, a portion of the performance fees is used to buy LDY from the open market. Governance can then choose to redistribute or burn part of this repurchased supply — gradually reducing circulating tokens over time and reinforcing scarcity.
Deflation Model Overview
Fixed max supply
No new tokens can ever be created
Holders are never diluted by emissions
Buybacks from real yield
Sustained, organic buy pressure
Token value scales with protocol usage
Governance-directed burns
Circulating supply decreases over time
Increases scarcity & long-term alignment
This ensures that value flows toward long-term participants rather than short-term speculators.
Buyback Distribution Structure
Performance fees flow through the FeeCollector and are executed by the BuybackManager. Purchased LDY is then allocated into two pools:
veLDY Community Pool
80%
Distributed to locked stakers (veLDY) as real yield
veLDY Council Pool
20%
Incentivizes governance execution & risk oversight
Stakers receive the majority of captured value.
DAO-Controlled Burn Program
The DAO (via veLDY voting) controls how repurchased LDY is treated:
✅ Redistribute 100% to stakers (default, increases yield APR)
🔥 Burn a portion (accelerates deflation & scarcity)
🔄 Adjust buyback intensity (based on TVL + liquidity conditions)
Burns are not automatic. They are intentional and governed to avoid destabilizing token liquidity.
Strategic Burn Capacity
Up to 30% of the total LDY supply is controlled by the DAO and may be:
Distributed as long-term staking rewards
Burned to reduce circulating supply
Re-allocated to partnerships or liquidity incentives
This allows governance to balance:
Boost yield APR
When staking demand is high
Increase scarcity & price support
When liquidity is deep and TVL is accelerating
Support strategic growth
For integrations & ecosystem alignment
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