IV.6 The floating sell tax
There are several ways to fund a protocol to maintain the price of its native token.
One of the mechanisms we use is the floating sell tax.
This floating sell tax varies between 10% and 50% of your sells.
When the price of the $PHI token increases, the tax decreases.
And when the price of the $PHI token decreases, the tax increases.
This mechanism allows several things:
-> It funds the backing treasury;
-> It funds the investment treasury;
-> It regulates the selling pressure;
This floating tax mechanism is a healthy mechanism for investors and the protocol.
The whales who wish to crash the $PHI price in order to have discounted nodes will be deprived of a part of their profits by the floating sell tax.
This tax feeds the backing treasury (for buyback) and gives an upward impulse to the $PHI share price allowing the most patient ones to obtain more consistent gains.
It also allows for an adjustment in case of too much difference between the amount of rewards given in $PHI and the ROI of the investment treasury. If the protocol gives out too many rewards compared to the ROI of the investment treasury, then a drop in the token price is inevitable. Therefore, the floating tax allows a balance in the ratio of rewards distribution to the ROI of the investment treasury.