Mint/Burn

The protocol maintains a balanced tokenomics system through a carefully designed mint and burn mechanism tied to betting outcomes. This system ensures long-term sustainability while providing rewards for successful bets.

How It Works

When users place bets, the following mint/burn mechanics are applied:

Winning Bets

  • When a user wins a bet, new tokens are minted as their reward
  • The mint amount is calculated based on the bet size and odds
  • Formula: Mint Amount = Bet Size × (Odds - 1)

Losing Bets

  • When a user loses a bet, their staked tokens are burned
  • The entire bet amount is removed from circulation
  • This burning mechanism helps offset the tokens minted from winning bets

Balance Mechanism

The system maintains equilibrium through:

  1. House Edge: A small house edge (typically 1-3%) ensures that over time, slightly more tokens are burned than minted
  2. Probability-Weighted Balance: The odds are set such that the expected value of mints and burns reaches equilibrium
  3. Dynamic Adjustments: The protocol can adjust parameters to maintain healthy token economics

Example

Let's consider a simple bet with 2.0x odds:

  • If a user bets 100 tokens and wins:

    • Mint: 100 tokens (100 × (2.0 - 1))
    • User receives: Original 100 + 100 minted = 200 tokens

  • If a user bets 100 tokens and loses:

    • Burn: 100 tokens (entire bet amount)
    • Total supply decreases by 100 tokens

Long-term Sustainability

This mint/burn mechanism is designed to:

  • Create natural token sinks through lost bets
  • Reward successful betting strategies
  • Maintain token value through controlled supply
  • Ensure protocol sustainability through the house edge

The system's design means that while individual users can profit from successful bets, the overall token supply remains controlled and sustainable in the long term.