🔥How to Combat Inflation?

Deflation is achieved with Burning Mechanism

SYNTH Burning Mechanism

To counteract inflation and promote a healthier token economy, Synthswap is using a Burning mechanism that is integrated directly into xSYNTH token. In order to understand Burning Mechanism, you have to be first familiarized with the xSYNTH's vesting mechanism.

Ratio for Conversion from SYNTH to xSYNTH is always 1:1, however conversion from xSYNTH to SYNTH is vested, with minimum duration of 14 days and full duration of 100 days. Unlock at day N € [14,180] is defined as:

$$Unlock(N) = 0.5 + ((N - 14) / 166) * 0.5$$

If a xSYNTH holder decides to convert between xSYNTH and SYNTH before the full 180 days have elapsed, the remaining difference gets burned.

$$Burned(N) = 1 - Unlock(N)$$

In addition to xSYNTH burning mechanism, Synthswap is performing regular buybacks and burns with accrued protocol fees.