# Buyback & Burn Buyback & Burn is an automated mechanism designed to reduce the circulating supply of SLD using real protocol revenue. Instead of relying on manual buybacks or occasional burn events, Sealed uses smart contracts to make the process systematic. When the protocol generates eligible revenue, a defined portion is routed to the Buyback & Burn contract. That contract uses ALGO to buy SLD from the market, and the purchased SLD is later sent to the burn contract. The goal is to make token burning directly connected to real usage of the Sealed protocol. ### Revenue-based burning The Buyback & Burn mechanism is funded from protocol revenue, not from new token emissions. This means SLD is burned only when Sealed generates eligible revenue through actual protocol activity. A defined share of this revenue is allocated to the Buyback & Burn contract. The contract receives ALGO, uses it to acquire SLD, and removes the purchased SLD from circulation. This creates a real-yield burn model: the stronger the protocol revenue, the more value can flow into SLD buybacks and burns. ### 30-day settlement cycle The Buyback & Burn mechanism uses a **30-day settlement cycle**. At the end of each 30-day period, the contract calculates the amount of ALGO allocated to Buyback & Burn from eligible protocol revenue. This 30-day amount becomes the budget for the next buyback cycle. Instead of spending it all at once, the contract spreads the buybacks across the following 30 days. This makes the mechanism easier to account for while still keeping market execution gradual. ### Five-minute buyback intervals Even though the settlement cycle is based on 30-day periods, buybacks are still executed in small, regular portions. The 30-day buyback budget is divided into 5-minute intervals across the cycle. The contract uses each portion to buy SLD from the market over time, instead of executing one large buyback. This creates steady buy pressure and reduces the risk of sudden market impact. ### Daily burning SLD purchased through the buyback mechanism is burned every 24 hours. This means buybacks happen continuously in small 5-minute portions, while burning happens once per day. The burn process removes the accumulated purchased SLD from circulation by sending it to the burn contract. This keeps the burn process frequent and transparent without requiring every small buyback to trigger a separate burn event. ### Smooth market impact The buyback amount is split into small, regular purchases to avoid sudden market impact. If a large 30-day buyback budget were used all at once, it could create a short-term price spike followed by unstable market behavior. By spreading purchases into 5-minute intervals, Sealed reduces the risk of a pump-and-dump effect and makes buyback pressure more gradual. This structure is designed to make the mechanism healthier and more predictable for the SLD market. ### Expired value and burns Unused value can also become eligible for the Buyback & Burn mechanism. If ALGO connected to a subscription is not claimed within one year, if subscription-based credits expire, or if individual credits expire after one year, that value can be classified as protocol revenue. Once it becomes revenue, the portion assigned to Buyback & Burn follows the same process: ALGO is routed to the contract, included in the 30-day settlement cycle, divided into 5-minute buyback portions, used to buy SLD, and the purchased SLD is burned every 24 hours. ### Buyback & Burn summary Sealed’s Buyback & Burn mechanism is automated, revenue-based, and executed through smart contracts. Eligible protocol revenue is settled every 30 days, routed to the Buyback & Burn contract, divided into 5-minute buyback portions, and used to buy SLD gradually over time. Purchased SLD is burned every 24 hours. This creates a real-yield-based burn model connected to protocol usage, while reducing sudden market impact through small, regular buybacks. --- # Agent Instructions: Querying This Documentation If you need additional information that is not directly available in this page, you can query the documentation dynamically by asking a question. Perform an HTTP GET request on the current page URL with the `ask` query parameter: ``` GET https://docs.sealed.channel/sld-token/buyback-and-burn.md?ask= ``` The question should be specific, self-contained, and written in natural language. The response will contain a direct answer to the question and relevant excerpts and sources from the documentation. Use this mechanism when the answer is not explicitly present in the current page, you need clarification or additional context, or you want to retrieve related documentation sections.