M0N3Y Tokenomics & Economics

Mathematical foundations of our deflationary tokenomics and value accrual mechanisms

Deflationary

Burn Mechanics

Value Accrual

Mathematical

Development Status

⚠️ Burn Mechanism Not Yet Launched

The M0N3Y deflationary burn mechanism is currently in development and has not been launched yet. The burn percentages, rates, and mechanics described in this documentation are subject to changebased on final implementation decisions and regulatory considerations.

Current Status:

• In Development: Burn mechanism smart contracts being finalized
• Subject to Change: Burn rates and percentages may be adjusted
• Regulatory Review: Final rates pending compliance assessment
• Community Input: Parameters may be refined based on feedback

Executive Summary

M0N3Y is designed to implement a mathematically rigorous deflationary mechanism where token burns will be automatically calculated based on protocol volume across all supported assets (stablecoins, BTC, SOL, etc.), creating a self-reinforcing cycle of adoption-driven scarcity and value appreciation. This mechanism is currently in development.

Initial Supply

∞

Burn Potential

Burn Parameter (TBD)

Token Metrics (Simulated Data)

⚠️ Burn mechanism not yet launched - showing simulated projections

📊 Supply Dynamics Modeling

What This Chart Shows: This visualization models the mathematical relationship between protocol volume, automatic token burns, and resulting supply dynamics. It demonstrates how deflationary mechanics could impact token scarcity over time.

Key Metrics:

Remaining Supply: Total tokens left after cumulative burns
Burned Tokens: Total M0N3Y tokens removed from circulation
Price Elasticity: Mathematical sensitivity of price to supply changes
Protocol Volume: Cumulative USDC value processed through the protocol

⚠️ Development Status: Burn mechanism not yet launched. These are economic models, not operational data.

Remaining Supply

M0N3Y Tokens

Total Burned

Protocol Volume

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Cumulative USDC

Price Elasticity

ε = βV/(S₀ - βV)

M0N3Y Deflationary Supply Dynamics

Real-time token burn impact on supply and price elasticity. Burn rate: 1.00%

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Price Elasticity Evolution

How price sensitivity increases as protocol volume grows and supply decreases

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Economic Insights

Deflationary Mechanics

• Automatic Burn: Every $1 of protocol volume automatically burns $0.010 worth of M0N3Y
• Supply Reduction: 0.00% of total supply already burned
• Price Elasticity: Current elasticity of 0.00 indicates high sensitivity
• Network Effects: Larger user base improves privacy for all participants

Value Accrual Model

• Automatic Burns: No manual intervention required
• Volume Scaling: Higher adoption accelerates deflationary pressure
• Predictable Mechanics: Mathematical transparency enables informed investment
• Long-term Incentives: Burns reward patient capital over speculative trading

Core Deflationary Mechanics

Burn Formula

The fundamental equation governing M0N3Y token burns:

ΔS = β × V

Where:

ΔS = Tokens burned per transaction

β = Burn percentage (rates TBD, subject to change)

V = Transaction volume in USDC/SOL value

Supply Dynamics

The total supply decreases over time based on cumulative protocol volume:

S(t) = S₀ - β × V(t)

Where:

S(t) = Remaining supply at time t

S₀ = Initial supply (1 billion tokens)

V(t) = Cumulative protocol volume up to time t

Price Impact Model

Token price responds to supply changes and demand dynamics:

P(t) = D(t) / S(t)

Where:

P(t) = Token price at time t

D(t) = Demand for tokens at time t

S(t) = Remaining supply at time t

Value Accrual Phases

Phase 1: Linear Growth

During early protocol adoption, burns create a linear relationship between protocol volume and supply reduction.

• Low protocol volume relative to total supply
• Linear burn rate: ΔS ≈ β × V
• Gradual supply reduction creates steady deflationary pressure
• Price appreciation primarily driven by adoption growth

Phase 2: Exponential Sensitivity

As protocol volume grows, remaining supply approaches critical thresholds, creating exponential price sensitivity.

• Supply reduction accelerates as S(t) approaches β-adjusted targets
• Price elasticity increases: ε = βV/(S₀ - βV)
• Network effects amplify value accrual
• Positive feedback loop between adoption and token value

Phase 3: Maturity & Stability

At maturity, the protocol achieves sustainable equilibrium with high elasticity and significant value appreciation potential.

• High elasticity creates significant value appreciation potential
• Stable burn mechanisms maintain deflationary pressure
• Cross-chain expansion maximizes burn aggregation
• Institutional adoption drives long-term value

Burn Mechanisms & Triggers

Automatic Burn Integration (Planned)

Unlike manual quarterly burns seen in older models, M0N3Y burns will be triggered automatically with every protocol deposit, ensuring consistent deflationary pressure. This mechanism is currently in development.

// Automatic burn on every privacy activation
function activatePrivacy(usdcAmount) {
const burnAmount = calculateBurnAmount(usdcAmount);
burn(burnAmount); // Automatic
enablePrivacy(usdcAmount);
}

Volume-Responsive Burns (Planned)

Higher protocol usage will directly translate to increased burn rates, creating a self-reinforcing cycle where adoption drives scarcity. Burn rates are still being finalized.

// Automatic burn rate scales with volume
burnAmount = β × transactionVolume;
totalSupply -= burnAmount; // Automatic
emit Burned(burnAmount, totalSupply);

Cross-Chain Burn Aggregation (Future)

Future implementations will aggregate burns across all supported blockchain networks, maximizing deflationary impact as the protocol scales. This feature is planned for later development phases.

// Multi-chain automatic burn aggregation
function aggregateBurns() {
totalBurned = solanaBurns + ethereumBurns + polygonBurns;
updateGlobalSupply(totalBurned); // Automatic
}

Mathematical Models & Projections

Elasticity Coefficient

The price elasticity of M0N3Y increases with protocol growth:

ε = βV/(S₀ - βV)

As V increases, ε approaches infinity, creating exponential price sensitivity

Network Effect Multipliers

Multiple factors amplify value accrual as the protocol grows:

• Privacy Anonymity Sets: Larger user base improves privacy for all participants
• Liquidity Efficiency: Higher volumes reduce timing correlations in privacy operations
• Developer Ecosystem: Growing application layer increases underlying protocol usage
• Cross-Chain Synergies: Multi-chain deployment creates additional burn opportunities

Revenue-Free Value Generation

M0N3Y generates holder value without traditional revenue sharing:

• Transparent Mechanisms: All burns verifiable on-chain through smart contract automation
• Predictable Deflation: Mathematical relationship between protocol growth and supply reduction
• Market-Driven Pricing: Secondary market dynamics determine value appreciation
• Stakeholder Alignment: Protocol operators benefit through holding, not fee extraction

Market Dynamics & Investment Appeal

Scarcity Premium

Systematic supply reduction creates natural value appreciation pressure through:

• Automatic Burns: Every protocol transaction reduces total supply
• Volume Scaling: Higher adoption accelerates deflationary pressure
• Predictable Mechanics: Mathematical transparency enables informed investment
• Long-term Incentives: Burns reward patient capital over speculative trading

Institutional Adoption

Growing recognition of deflationary mechanisms as sustainable value drivers:

• Regulatory Compliance: Utility token classification avoids security regulations
• Transparent Economics: On-chain verification of all burn mechanisms
• Privacy Infrastructure: Essential utility rather than speculative feature
• Cross-Chain Potential: Multi-network deployment maximizes value capture

Explore Further

→ Token Overview → Regulatory Compliance → Integration & Usage → Investment Framework