Fees and revenue

GAMA buyback-and-burn

Part of GAMA's protocol revenue is used to buy the GAMA token and burn it, in the same step.

#Funding

The buyback-and-burn receives 30% of protocol revenue. Its funds build up in the fee escrow, in whichever tokens the revenue was paid in. They keep building up while buybacks are paused. The buyback contract has no way to withdraw them for any other purpose.

#How a buyback works

A buyback operator runs each purchase. In one transaction, the buyback:

1. Takes an amount of its funds from the fee escrow.
2. Swaps it for GAMA along a route the protocol owner has approved.
3. Checks that the amount of GAMA received is at least the minimum set for that purchase.
4. Burns all of the GAMA it received.

Funds already held in GAMA are burned directly. On the current testnet release, buybacks with other tokens start only after GAMA has graduated.

Pending release. In the next release, the buyback can also buy GAMA on its bonding curve before GAMA graduates.

#Price protection

Each swap is limited in how far it can move the price, 3% per step by default. A swap that would go further does not happen. The operator also checks prices against its own reference and limits how much it spends. On the testnet it spends at most 0.01 ETH per purchase and 0.05 ETH per five minutes.

#Burning

On the current testnet release, burning removes the tokens from GAMA's total supply.

Pending release. In the next release, burned tokens are sent to a dead address that nobody controls, and the total supply number does not change.

#Pause

The protocol owner can pause buybacks. Pausing does not stop fees from being collected, claims or trading.