Lightning Protocol is the first fully deflationary and supply elastic protocol. There are no negative rebases and yet it is fully deflationary.
How it works
Lightning works through a dynamic burn rate, which is applied at each Buy/Sell order. Transactions between wallets and transactions that interact with the future ecosystem are not taxed, to ensure the usability of the protocol.
Lightning Cycle
A full deflationary cycle which, in the beginning, will be multiple times per day and each cycle will burn 1.275% (1.275.000 Tokens) of the total token supply.
Lightning Squeeze
The second half of the cycle is called the Lightning Squeeze. Burn rate increases and the total supply burn accelerates, leading to a fast squeeze of the supply.
Lightning Rebase
A positive rebase that expands supply by 50 % of the burnt tokens during the current cycle. Each cycle will still burn 1.275 % of the starting total supply but will also rebase the 50 % of burnt tokens among wallets.
Fee and Rebase System
Lightning works through a dynamic burn rate, which is applied at each Buy/Sell order. Transactions between wallets and transactions that interact with the future ecosystem are not taxed, to ensure the usability of the protocol.
The burn rate will change depending on the total supply traded in the current Lightning Cycle. For every 1,000,000 $LIGHT traded, the fee will move up one increment until it reaches the cap at 12%, which will apply after 14,000,000 $LIGHT have been traded.
Once the cap is reached, it will automatically reset back to the lowest fee and the Lightning Rebase is triggered. The Lightning Rebase expands supply by 50% of the burnt tokens during the previous Lightning Cycle. This way, early investors pay the lowest possible fee and get rewarded for holding through multiple cycles. Lightning Cycles will be completed faster in the beginning and will take longer to complete over time.
This is done to ensure a long term deflationary protocol, which achieves a stable rate of deflation over time. The first Lightning Cycle is expected to last under a few hours, meaning there will be multiple rebases a day for early adopters.
Lightning Rebase means 50% of the tokens burned throughout the current cycle will be rebased to holders as positive rebase. By doing that, the protocol ensures only positive rebases on an otherwise fully deflationary protocol.
Graph showing Total Supply through multiple Lightning Cycles
