We recently shared a new update on PulseX. This update concerns the double burn of PulseX. But then, what is the mechanism of PulseX? Is PulseX still deflationary? Or does it become inflationary? What will happen? Well, that's what we're going to talk about in this video.
So, as usual, watch this video to the end so you don't miss any details.
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Recently, Richard Heart took some screenshots on PulseX. This screenshot was not in line with the OG idea.
What we mean is that with the original idea of PulseX, when you stake PulseX, you will get something called xPulseX and the ratio is not the same. It's not 1:1. It was 1.24. In effect, the message said "By holding xPulseX, you are participating in PLSX buybacks that use 0.07% of the transaction fee to buy back PLSX and send it to this pool.
This increases PLSX rationing, which means you will be able to claim more and more PLSX for each xPulseX token you hold."
You can see that this is no longer about the burn. It's just about bringing PulseX to this pool and then redistributing it among the people who participate.
Now let me explain it to you step by step in a very simplistic way.
So, imagine you have 10 PLSX right now. After the launch, you get them. They are sitting in your and your MetaMask wallet. Now, if you want to go ahead and participate in the next step, you take those 10 PulseX. You just take them and you're going to get 8.3 xPulseX.  And now if the price of PulseX, goes up, the ratio between PulseX and xPulseX will also change.
Now what ends up happening is that when the ratio changes between these two, your xPulseX, they are used to the value 10PulseX at the moment at worst 20 PulseX. Now you're wondering where those extra 10 PulseX come from?
Those extra 10 PulseX will come from the pool. Do you remember? There will be an address or a bot. It's not clear yet, who's going into the market, all the transactional PulseX that is going to happen on AMP. For all these transactions, there's a fee associated with them. From that fee, they're going to buy that PulseX right and bring it to that pool. The actual fee is 0.07%. They're going to take it to that pool and instead of burning it now, we're going to redistribute it according to this formula, according to this mechanism. We encourage people to bet their PulseX, which are PulseX, to get more PulseX later on. But wait for a second TCP. We thought PulseX was deflationary, Richard Hart said so.
Now it looks like it's becoming inflationary. No, it's not. It's not quite inflationary. However, it's not quite deflationary. So keep watching.
Now imagine that your PulseX increases.
Now the amount of value also increases. So if you bet 10 PulseX, you will still have that 8.3 xPulseX. The quantity won't increase, but the value will.
Let's continue with this. This is called a merit token. xPulseX represents your share of the PulseX pool. Every transaction on PulseX at a rate of 0.07% is collected and goes to the PulseX token redemption and sent to this pool.
Imagine you had one dollar on the first day of the PulseX event. Now you trade that dollar and you get 10,000 PulseX, right? Let's not count the actual multiplier. Let's keep it simple, so 10,000, you bring it in, you put the ratio here, which is 1.2, you're going to end up with 8333 xPulseX. You take that xPulseX, you put it into play. You get an extra APY.
So, if your PulseX goes up again, because it's not just about the bet where you can only get a good APY, it's not about the APY. When the price of PulseX goes up, your actual ratio will change. Keep that in mind.
With that, we have three scenarios.
1: Redistribution + burn.
2: Abandon the burn.
3: Stick to the OG (Original Idea): PulseX is deflationary.
This mechanism will probably be twisted, changed or not even taken. So let's go through each of them.
The first was to reduce scarcity over time unless they bombed the actual burn percentage by 21 just to even it out.
The original idea was, or probably still is, to have 21% of 0.29 dedicated to PulseX. Burn it, take it out of circulation. Nobody can access what's going to go away. Now, what you have here is that they are starting to implement what we just showed you. So the burning will be less. Why? Because PulseX will not be burnt. This 21% will not be burnt. Some of it will be redistributed. So instead of, say, burning a billion PulseX, hypothetically speaking. Now let's burn 500 million and redistribute the other 500 million among people. The problem is that scarcity, scarcity and buying pressure on PulseX will be reduced. This means slower price appreciation because now we have a total supply that is immense.
By reducing this burn feature and redistributing the remaining coins, it won't have the powerful PulseX buying snowball effect that people expect. The price of PulseX will slowly increase.
And now, if we look at number two, which is quite clear, just drop the burn mechanism and redistribute the amount of PulseX. That's the problem. The thing about this is that there will always be a static total supply. So no matter what supply we go in with, it's always going to stay that way. Always, you're going to have much slower price appreciation, lower price appreciation if you want to discuss the technicalities, like, you know, scarcity and that's the key to appreciation in finance generally.
Number three is to stick to the original idea. So, no more giving up burns and never again giving away a part of a token and burning the rest.
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