Trading tax explained

Is there a tax on buying and selling the token?

Yes, we've implemented variable buying and selling taxes, as seen in the graph below.

Why is there a tax? Good token design rewards holding and staking, while making selling of tokens less desirable. These incentives should be designed with the benefits of all holders in mind. I’m sure we’ve all seen the below chart, popularised by Olympus DAO.

Lithium is unique in that sell-offs are most likely to occur at certain events that are controlled by the ecosystem. Namely, post-raise and after supercharge rewards are delivered.

The good thing about having buy and sell pressure being related to utility rather than macro forces, is that at Lithium we have the optionality to put measures in place to discourage and encourage behaviour — we aren’t a whim to the markets.

Lithium V2 will be taking advantage of this opportunity by implementing variable buy and sell taxes. We will release exact tax values closer to the time of launch, but for now the below graph should demonstrate how we will vary buy and sell taxes to encourage buys at the start of a charge cycle, and discourage sells at the end of one. This will incentivise investors to keep their tokens locked up, achieving the aspirational (3,3) game theory.