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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 is dedicated to buy back & burn GRAIL, in order to apply a continuous buying pressure on it.

xGRAIL redeems

When converting xGRAIL to GRAIL, 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.
For instance, if a user redeems 1000 xGRAIL with the minimal 14 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.

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.