> For the complete documentation index, see [llms.txt](https://adro.gitbook.io/doc/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://adro.gitbook.io/doc/adro-protocol/tokenomics/buyback-and-burn.md).

# Buyback and Burn

> **ADRO PROTOCOL operates a powerful deflation model that increases the scarcity of AC and drives long-term value appreciation through continuous token burning and supply control.**

We suppress inflation in the token ecosystem through a buyback and burn system linked to actual business revenue, moving beyond simple issuance limits.

#### 🔥 Core Burn Logic

Various activities occurring within the ADRO ecosystem lead to natural token burning.

1. **Ad Revenue-based Buyback & Burn :** A certain percentage of the advertising fees paid by advertisers to the IoT and AR platforms is used to purchase (Buyback) AC from the market. The purchased AC is immediately sent to a burn address and permanently removed from circulation.
2. **Supply Reduction through AC to ACS Conversion :** When a user swaps AC to ACS for shopping or payments, that AC is removed from the market circulation. Since it is a one-way structure where reverse conversion from ACS to AC is impossible, the selling pressure on AC is permanently reduced by the amount converted.
3. **Platform Operational Fee Burn :** Operational fees generated during asset swaps or use of specific services are systematically burned or attributed to the ecosystem fund, strictly limiting recirculation. However, ACS P2P transfers between members are provided without fees to activate the ecosystem.

#### 📈 The Virtuous Cycle of Value Appreciation

The system is designed so that business growth directly leads to an increase in token value.

* **Merchant Expansion :** As the number of usage areas increases, demand for ACS grows -> Acceleration of AC to ACS swaps -> Decrease in AC circulation
* **Advertiser Influx :** Increase in ad execution -> Expansion of AC buyback scale in the market -> Support and rise of AC price
* **Ecosystem Activation :** ACS full consumption structure -> Increase in partner revenue -> Reinvested as resources for marketing and buybacks

#### 📊 Supply & Demand Control

<table data-header-hidden><thead><tr><th width="177"></th><th width="264.5555419921875"></th><th></th></tr></thead><tbody><tr><td>Category</td><td>Management Strategy</td><td>Expected Effect</td></tr><tr><td><strong>Supply Control</strong></td><td>Lockup and Phased release</td><td>Prevent initial oversupply and secure market trust</td></tr><tr><td><strong>Demand Creation</strong></td><td>ACS Shopping engine &#x26; Exclusive hot deals</td><td>Induce AC purchase and swap</td></tr><tr><td><strong>Circulation Control</strong></td><td>AC Staking and Grade benefits</td><td>Secure long-term holders and lock liquid volume</td></tr><tr><td><strong>Permanent Burn</strong></td><td>Ad revenue and Operational fee burn</td><td>Continuous reduction of total AC supply</td></tr></tbody></table>

#### ♡ Blocking Speculation and Cashing-out Risks

ADRO PROTOCOL has established the following mechanisms for regulatory compliance and ecosystem protection.

1. **One-way Swap Principle :** To prevent ACS earned as game money or content rewards from being recklessly leaked to exchanges for cashing out, all conversions are directed only towards consumption-oriented ACS.
2. **Focus on Payment Assetization :** By focusing the purpose of rewards on practical purchasing power (Shopping) rather than speculative profit, we maintain a stable payment ecosystem and protect it from external market volatility.

> **Value comes from real-world use, not numbers. Through the active consumption of ACS and the system of returning ad revenue to AC, ADRO PROTOCOL will complete a token economy that proves higher value as time passes.**