# $GND Deflationary Mechanisms

In addition to the hard cap set on GND's supply, we also implemented some deflationary mechanisms in order to reduce the total supply.

## 1. Buyback & Burn

A share of the protocol earnings (40-60%) is dedicated to buyback & burn, in order to apply continuous buying pressure on it.

## 2. xGND Redemptions

When converting xGND to GND, if the vesting duration isn't the maximum, the xGND:GND ratio will be lower than 1:1, down to a minimum of 1:0.5. All of the GND excess will automatically be burned.

For instance, if a user redeems 1000 xGND with the 20 days vesting duration, he will obtain a 1:0.5 ratio, and receive 500 GND in the end.

\=> That means a total of 1000 - 500 = 500 GND will be burned during the process.

## 3. xGND Deallocations

When xGND is staked, a deposit tax is applied. It can vary between contracts, but will usually be 2%.

\=> The corresponding GND amount will automatically be burned.<br>

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