Supply Contraction

When OWY holders make a transaction, they pay a fraction of their OWY as a tax, contributing to the reduction of the circulating supply.

This page involves detailed calculations designed to manage and control supply reduction in a manner that upholds principles of fairness and operational efficiency.

Taxation formula

$$\displaystyle TaxValue = [Transfer Value \times Deflation Rate] \times [\frac {BlockIn^3}{VWAB^3}] \times [\frac{TaxAccumulation_{individual}}{TaxAccumulation_{total}}] \times 1.69$$

The formula can be broken down into three main components for clarity: the base value, discounts (based on time and tax accumulation), and a magic number. Additionally, there is a hidden element known as the maximum tax.

1 Base Value

$$[TransferValue \times Deflation Rate]$$

• Transfer Value = initial or intended amount of OWY tokens to be transferred.

• Deflation Rate = the current rate of supply contraction, which varies according to different supply stages as outlined in the Deflation Schedule below.

Deflation Schedule

Applying the stepping approach with maturity stages, the current deflation rate correlates to the stage of OWY total supply.

Stage	Total Current Supply	Deflation Rate
1	<= 69,000,000.00	6.900%
2	<= 47,610,000.00	4.761%
3	<= 32,850,900.00	3.285%
4	<= 22,667,121.00	2.267%
5	<= 15,640,313.49	1.564%
6	<= 10,791,816.31	1.079%
7	<= 7,446,353.25	0.745%
8	<= 5,137,983.74	0.514%
9	<= 3,545,208.78	0.355%
10	<= 2,446,194.06	0.245%
11	<= 1,687,873.90	0.169%
12	<= 1,164,632.99	0.116%
13	<= 803,596.76	0.080%
14	<=554,481.77	0.069%
15	<= 69	0.000%

The deflation rate starts at 6.9% and gradually decreases to 69% of the previous rate as the total supply moves to the next stage, which is also 69% of the previous stage's supply.

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2 Discounts

2.1 Time Accumulation Discount

$$[\frac {BlockIn^3}{VWAB^3}]$$

• BlockIn = the average Ethereum block number at which the transaction owner originally acquired their OWY tokens.

• VWAB (Volume-Weighted Average Block) = the average BlockIn of all OWY holders.

2.2 Tax Accumulation Discount

$$[\frac {Tax Accumulation_{individual}}{TaxAccumulation_{total}}]$$

• TaxAccumulation_individual = The total amount of tax that the owner of the transaction has accumulated through their payments.

• TaxAccumulation_total =The total amount of tax paid by all OWY holders since the inception of the system.

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3 Magic Number

To intensify supply contraction, OWY applies a 69% tax increase exclusively to senders who's BlockIn exceeds VWAB.

$$1.69$$

If no discount value exists—indicating that the OWY tokens are newly received and immediately transferred to another account—then no discounts will be applied, and the magic number will be enforced.

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4 Maximum Tax

When an individual makes a short-term spending decision without any accumulated saving value in their tokens, the formula shown in 2.1 Time Accumulation Discount multiplied by the magic number could result in an excessively high tax amount. To address this, we impose a maximum tax limit:

$$𝑀𝑎𝑥𝑖𝑚𝑢𝑚 𝑇𝑎𝑥 = 𝑇𝑟𝑎𝑛𝑠𝑓𝑒𝑟𝑉𝑎𝑙𝑢𝑒 × 𝐷𝑒𝑓𝑙𝑎𝑡𝑖𝑜𝑛 𝑅𝑎𝑡𝑒 × 1. 69$$

Regardless of the tax amount calculated using the main formula, if it exceeds this ceiling value, the user will only be charged up to this maximum amount.

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End of deflation

Once the Final Phase begins and the deflation mechanism ends, the OWY token will transition to a regular ERC-20 token with no tax. Users who wish to permanently burn additional OWY can still send their tokens to the zero address. This manual burn process has no limit.

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