Community Forex Questions
How do reflection tokens work?
Every transaction in the network is taxed by reflection tokens. Most crypto reflection mechanisms levy a 10% transaction tax, which is then distributed among all holders, a liquidity pool, and, in some cases, a coin burn wallet.
With this mechanism in place, investors can gain more tokens by "HODLing" the token, while also benefiting from a potential price increase caused by coin burns.
The reflection mechanism is decentralised and trustless because it is managed by a smart contract that distributes tokens to all holders' wallets, a liquidity pool, and a burn wallet. All holders need to do is 'hold and earn,' and carefully manage their wallets.
Because every wallet that receives a portion of the fee can be publicly audited on the blockchain, the entire process is transparent.
The hold and earn functionality allows users to earn yield without staking their tokens, while also addressing the issue of excessive price movements and selling pressure. It also addresses the following key issues:
No staking
Buyback and burn mechanism
DeFi yield generation
Security is ensured through the smart contract
Fair distribution of earned tokens
With this mechanism in place, investors can gain more tokens by "HODLing" the token, while also benefiting from a potential price increase caused by coin burns.
The reflection mechanism is decentralised and trustless because it is managed by a smart contract that distributes tokens to all holders' wallets, a liquidity pool, and a burn wallet. All holders need to do is 'hold and earn,' and carefully manage their wallets.
Because every wallet that receives a portion of the fee can be publicly audited on the blockchain, the entire process is transparent.
The hold and earn functionality allows users to earn yield without staking their tokens, while also addressing the issue of excessive price movements and selling pressure. It also addresses the following key issues:
No staking
Buyback and burn mechanism
DeFi yield generation
Security is ensured through the smart contract
Fair distribution of earned tokens
Reflection tokens are a type of cryptocurrency that automatically rewards holders with additional tokens through a built-in redistribution mechanism. Whenever a transaction occurs, such as a buy, sell, or transfer, a small fee (usually between 1% and 10%) is deducted and distributed proportionally among existing token holders. This process, called "reflection," incentivises long-term holding by passively increasing an investor's balance over time. The rewards are distributed in real-time or at regular intervals, depending on the token's smart contract design. Reflection tokens gained popularity with projects like SafeMoon, which popularised this model. While they offer passive income potential, investors should assess risks such as high transaction taxes, price volatility, and sustainability. The system relies on blockchain transparency, ensuring automatic and fair distribution without manual claims.
Dec 13, 2022 21:41