Taxes and P.I.T.

Crucial when first launching!

Protocol Health

In order to ensure the long-term sustainability and growth of a crypto protocol, taxes must be implemented to fund development, marketing, Buy-Back-Burns and investments. This will not only help expand the ecosystem but also provide a steady stream of resources for staking and farming activities that can further increase the value of assets held by the protocol. The health of a crypto protocol is absolutely critical for its success as it determines how well it can attract new users or investors while retaining existing ones. A healthy crypto protocol should have an active community with strong governance mechanisms in place that are constantly striving towards improving user experience while ensuring security at all times. By investing in these areas through taxes collected from users, protocols can create an environment where everyone benefits from their use case which will ultimately lead to greater adoption rates over time.

Buy and Sell Taxes

When buying or selling both $ION tokens, you will be subject to the same tax rate and distribution. The maximum buy tax is 12%, with 6% going directly to the General Treasury and 6% going straight to Liquidity (LPs). For sell taxes, the maximum rate is 18%, with 9% of that amount being allocated towards both the General Treasury and LPs.

Price Impact Tax (P.I.T.)

Using P.I.T. To Protect Ionia P.I.T. is an abbreviation for Price-Impact-Tax and is calculated with the following equation:

S = Token sold in $USD

L = value of the LP in $USD

( S / L ) * 100% = P.I.T.

The P.I.T System is an additional layer of protection for the protocol, designed to discourage dumping and encourage investors to take profits responsibly. All proceeds from the P.I.T. Tax will be directed into The PIT Treasury and used exclusively for strategic Buy-Back-Burns - a process that reduces circulating supply, increasing token value over time and providing The Twin Tokens in case of a decrease in liquidity.

The PIT Treasury can use BNB Staking to safely grow and provide liquidity to the liquidity pool in case of emergencies by staking its BNB holdings with an established staking provider. By doing so, it will earn rewards from the platform for contributing their coins to a secure network, as well as any appreciation of their coins’ value over time. These rewards could then be used to add additional capital into the PIT liquidity pool when needed on short notice due to market fluctuations or other unexpected events. Additionally, this strategy allows the treasury team more flexibility and control over how much money is allocated towards providing emergency funds for times when it may be necessary – all while continuing to earn passive income from their holdings through staked rewards earned each month/quarter/year.

DISCLAIMER: P.I.T. will only apply to sales and its treasury will only contain BNB/BUSD and the P.I.T. tax will be added on top of the selling tax.

How P.I.T. allows an almost endless liquidity

The Price-Impact-Tax is a mechanism designed to create almost endless liquidity in the Ionia protocol’s liquidity pool. This works by taxing traders whenever they make a sale that would cause the price of an asset to decline in a significant manner. The amount of tax collected depends on how much of an impact their sale would have on the price, with larger sales incurring higher taxes than smaller ones. The taxed BNB/BUSD can then be used to add it back into the liquidity pool, creating more buying pressure and allowing for greater market depth and stability. In this way, traders are discouraged from making large sales or taking part in activities that could destabilize prices while simultaneously providing additional funds for further trading activities within the protocol's ecosystem.

On top of that, the Ionia team will stake the P.I.T treasury to increase liquidity within the protocol and promote price stability by adding BNB and BUSD into their LP on Ionia.

To do this, they can use several decentralized exchange (DEX) protocols such as Swych and Pancake Swap to provide liquidity for both currencies in a single pool. This will allow users to buy/sell both tokens against each other seamlessly while also earning rewards from trading fees associated with these pools that are shared amongst all participants in the pooling process – providing more incentive for people to participate in this activity than just holding onto their tokens passively.

Where do taxed tokens go?

When Buy/Sell taxes and P.I.T. take place, 100% of the $ION.GOV tokens will be burnt as well as 50% of the $ION.RFS tokens. The other 50% will be redirected to the Reflection Treasury which will automatically distribute rewards when Ionia enters the Deflationary period.