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Reducing $NEUTRO supply Mechanism
Alongside the established hardcap on $NEUTRO, we have incorporated deflationary measures to effectively decrease the overall token supply.
During the redeem of $xNEUTRO to $NEUTRO, if the vesting duration is not set to the maximum, the xNEUTRO:NEUTRO ratio will be adjusted to a value below 1:1, ranging from 1:0.5 as the minimum. Any surplus $NEUTRO obtained during this process will be automatically burned.
Let's take an example to illustrate this process:
If a user chooses to redeem 1000 $xNEUTRO with the minimum vesting duration of 15 days, they will receive a ratio of 1:0.5, resulting in 500 $NEUTRO. Consequently, a total of 1000 - 500 = 500 $NEUTRO will be burned throughout the redemption process.
When users deallocate $xNEUTRO from a Plugin, a deallocation tax is imposed, typically set at 0.5%. This tax may vary across contracts. Furthermore, the corresponding amount of $NEUTRO will be automatically burned as a result of the deallocation process.