Ctrlk
For the complete documentation index, see llms.txt. This page is also available as Markdown.

Buy-back & Burn

This section explains the design, role, and guardrails of the Buy-back & Burn (B&B) mechanism.

B&B is the primary engine for reducing WANNA’s circulating supply, creating a structural link between infrastructure growth and token scarcity under strict safety constraints.

1. Purpose & Design Principles

The mechanism is built on four core pillars:

  • Safety First: Protocol solvency, peg stability, and risk buffers always take priority over buy-backs.

  • Usage-Linked Scarcity: Only actual Net Surplus generated by the protocol is used. There is no artificial or debt-funded B&B.

  • Transparency: Rules governing size, frequency, and execution are transparent and verifiable.

  • Governance-Controlled: WANNA governance retains the ability to adjust parameters as market conditions change.

2. Source of Funds

Funds for Buy-back & Burn come exclusively from Net Protocol Surplus:

NetSurplus=TotalRevenue−(RiskBuffers+OpEx+Incentives)Net Surplus=Total Revenue−(Risk Buffers+OpEx+Incentives)

Revenue Sources (by phase):

  • Yield from GUSD Reserves (Phase 2)

  • Brokerage Fees & Spreads (Phase 3)

  • Derivatives / Routing Revenue (Phase 4)

  • Mainnet Payment & Settlement Revenue (Phase 5)

Waterfall Logic: Before any buy-back occurs, capital is first allocated to:

  1. Risk Buffers (including FX safety margins)

  2. Operational Costs (OpEx and essential incentives)

Only the remaining surplus is eligible for B&B.

3. Execution Model

The process follows a transparent cycle:

  1. Accumulation

    • Surplus accumulates in a designated treasury contract (denominated in GUSD / USDC).

  2. Buy-back

    • The protocol purchases WANNA on open markets (DEX / CEX).

  3. Burn

    • Purchased tokens are sent to a verifiable burn address, permanently reducing total supply.

4. Policy Parameters

To ensure predictability, B&B operates under clear parameters adjustable by governance:

  • Frequency: e.g., weekly, monthly, or threshold-based.

  • Allocation Ratio: The percentage of Net Surplus allocated to B&B vs. growth / buffer funds.

  • Execution Limits: Maximum volume per period to minimize slippage and price impact.

  • Priority Rules: Explicit conditions to pause or reduce B&B (e.g., if CR or LCR drops below target).

5. Transparency & Reporting

To maintain trust, all activities are observable:

  • On-chain Records: Buy-back transactions and burn addresses are publicly visible.

  • Periodic Reporting: Summaries of Net Surplus generated versus the amount used for B&B.

  • Dashboards: Real-time or periodic analytics showing the cumulative deflationary effect on WANNA supply.

6. Safeguards & Emergency Controls

  • Automatic De-Prioritization: In stress scenarios (e.g., low liquidity, CR/LCR breach), B&B is reduced or suspended to restore solvency and buffers.

  • Governance Kill-Switch: Governance can pause operations or redirect surplus during abnormal market conditions.

  • No Obligations: There is no legally binding obligation to execute buy-backs at specific times, prices, or volumes.

7. Disclaimers

  • No Guaranteed Value: B&B does not guarantee a specific token price, yield, or return.

  • Not a Dividend: WANNA holders do not receive direct revenue distributions. B&B influences supply dynamics but is not a revenue-sharing scheme.

  • Subject to Change: All parameters and policies are subject to governance updates within legal and regulatory limits.

PreviousTokenomicsNextGovernance

Last updated