Buyback & Burn Mechanism

Unlike many Web3 projects with short-term token incentive models, Dolphin.fm innovatively distributes platform revenue to buyback & burn tokens, creating a strong deflationary model. This mechanism continuously provides $DOLFM with buying power, driving the currency price to rise over the long term.

Source of Buyback Capital:

• Altcoin trading fees

• DeFi product earnings carry

• Agent service fees

A portion of the above platform revenue will be guaranteed by smart contract to be distributed into the Treasury to perform buybacks quarterly.

Buyback & Burn Support Price Rise % = （1 + a * buyback/circulation cap) ^ 3 - 1

Intuitively, the price impact depends mainly on two factors: the amount of the buyback and the circulation cap. The larger the buyback amount, the greater the buying power it provides; conversely, the larger the circulation cap, the smaller the impact of the buyback.

The impact of the buyback is not a one-time event. When a buyback occurs, the initial price rise can lead market participants to buy in, potentially causing subsequent rounds of price increases.

According to our model, the buyback percentage leverages the price rise percentage, represented by the parameter “a”. We assume “a” declines over time since the influence of buybacks decreases as the price rises (in our price projection model, “a” is set as a constant 1).

Reference: In stock markets, an average buyback of 0.30% of outstanding shares within a month increases the stock price by 40 to 70 basis points relative to the non-buyback class of stock (Leonce Bargeron, Michael Farrell, 2021).

The buyback ratio will gradually increase over time, boosting the currency price. According to traditional stock market data, every 10% of $DOLFM buyback and burn will drive an additional price increase of about 20%.