# 🔥┃Deflationary mechanisms

In addition to the hardcap set on GRAIL, we also implemented some deflationary mechanisms in order to reduce the total supply.

### Buy back & burn

A share of the [protocol earnings](https://docs.camelot.exchange/tokenomics/protocol-earnings) is dedicated to buy back & burn GRAIL, in order to apply a continuous buying pressure on it.

### xGRAIL redeems

When [converting xGRAIL to GRAIL](https://docs.camelot.exchange/tokenomics/xgrail-token/conversion-redeeming), if the vesting duration isn't the maximum, the xGRAIL:GRAIL ratio will be lower than 1:1, down to a minimum of 1:0.5. All of the GRAIL excess will automatically be burned.

{% hint style="info" %}
For instance, if a user redeems 1000 xGRAIL with the minimal 15 days vesting duration, he will obtain a 1:0.5 ratio, and receive 500 GRAIL in the end.

That means a total of 1000 - 500 = 500 GRAIL will be burned during the process.
{% endhint %}

### xGRAIL deallocations

When deallocating xGRAIL from a Plugin, a deallocation tax is applied. It can vary between contracts, but will usually be of 0.5%.

The corresponding GRAIL amount will automatically be burned.