Friction Finance

Automated Burns

TAO's burn process is 100% automated.
At launch, 1.25m xTAO were sent to the BSC burn address, this accounts for 5% of the total supply. Now while this may not seem significant, the impact of this transaction kickstarted a process that will burn millions more.
xTAO automatically distributes 3% of every transaction to all holders proportionally, this mechanism has a compounding effect wherein the compound automatically happens after every transaction.
This also means the burn address receives a 5% portion of the transaction fee as it accounts for 5% of the total xTAO supply. As more volume occurs on xTAO, the burn address will keep getting larger and larger automatically.

What if the Burn address gets too large?

Although it's impossible for the burn address to ever consume the entire supply, there could come a time in xTAO's future where the burn address is very large. There is a function on the xTAO token smart contract that allows for an address to be excluded from receiving the 3% transaction fee. Once a DAO is established, this something that could be voted on in the future if it was necessary. To be clear, if the burn address was excluded from receiving fees in the future, all the current burned xTAO will still be gone forever. Excluding the burn address will just prevent more xTAO being automatically sent to it after it is excluded.