9. Burn Mechanics

9.1 Rationale

Burns are integrated into M87’s design to create a counterbalance to emissions and to tie token scarcity directly to real activity. By destroying tokens in predefined circumstances, the protocol ensures that supply grows only in proportion to genuine adoption, protecting long-term sustainability.

9.2 Automated Fee Burns

A fraction of transactions executed within the ecosystem is permanently removed from circulation. These include:

• In-venue payments such as session fees, tournament registrations, or merchandise purchases.

• On-chain microtransactions linked to M87_ID activity.

• Marketplace commissions on secondary sales of NFTs or digital goods. This mechanism ensures that the more the venue and ecosystem are used, the more tokens are burned, directly linking usage to scarcity.

9.3 Event-Based Burns

Special events provide opportunities to amplify burn activity and turn it into a visible part of the community experience. Examples include:

• A percentage of tournament entry fees burned after each competition.

• Limited edition NFT drops where part of the revenue is destroyed.

• VIP subscriptions where a defined fraction of the payment is burned.

Event-driven burns are flexible and provide marketing opportunities: each burn announcement reinforces the project’s credibility and scarcity narrative.

9.4 Penalty Burns

To protect the ecosystem from abuse, penalty burns act as a deterrent against malicious behavior. Tokens seized from bots, Sybil farming, or exploit attempts are destroyed. This strengthens trust in the ecosystem and demonstrates that manipulation will not be tolerated.

9.5 Buybacks and Burns

In later phases, the DAO will allocate part of venue revenues or treasury resources to buy tokens on the open market and burn them. This creates dual pressure: buy-side demand from the DAO and reduced supply from the burn, reinforcing tokenholder confidence.