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Buy-and-Burn

The BuyAndBurn contract takes 62% of all protocol fees and uses them to buy LODE on the open market and permanently destroy it.

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How It Works

  1. Protocol fees accumulate from minting
  2. distributeETH() sends 62% to the BuyAndBurn contract as WETH
  3. Anyone calls buynBurn() to swap WETH for LODE on Uniswap V3
  4. All purchased LODE is immediately and permanently burned
  5. The caller earns a 0.33% incentive fee in ETH

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Uniswap V3 Pool

ParameterValue
PairLODE / WETH
Fee tier1%
RangeFull range
Initial liquidity100B LODE + 17 WETH

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LP Fees

LP trading fees (1% on every swap in the pool) are collected periodically via collectFees():
  • LODE fees are burned immediately
  • WETH fees are recycled into future buy-and-burn swaps

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Swap Caps

To manage price impact, swaps are capped:
CapStarting ValueAdjustable?
Per-swap cap0.01 WETHOwner can increase (minimum 0.01)
Global WETH cap0.7 WETHOwner can increase only
Once the global cap is reached, no more buy-and-burn swaps occur until the owner raises it.

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Why It Matters

Every buy-and-burn transaction:
  • Removes LODE from circulation permanently
  • Creates buy pressure on the Uniswap market
  • Reduces total supply over time
Combined with user burns, this makes LODE increasingly scarce as the protocol generates more fees.