How — and why — the split between burning and time-locking LMDA moves. One published rule instead of a monthly judgement call, so you never have to take our word for it: the two commitments — supply only shrinks and the protocol never market-sells — hold in every state the mechanism can reach. This is a proposal, open for feedback before it lands in the strategy doc.
A burn floor of 25% on every LMDA spend, forever. Beyond the floor, the split follows one of three published regimes — protect (25% burn), rebuild (50%), flush (75%) — selected by one internal number: the platform's USDC runway versus a 24-month target. Locked LMDA vests into a protocol-owned reserve over 12 months; a fixed slice of it supplies a fully visible liquidity book that strives to quote both sides — for every ask, a matching bid — post-only, on an on-chain order book. Filled asks are passive sales whose USDC sweeps to the reserves — the protocol only ever provides liquidity; it never takes it. This is not a stabiliser and not a rescue device; it exists to be fair, compliant, and durable.
Any split has to satisfy all three at once. A fixed number can satisfy the first two or the last two — never all three. That's why the split is dynamic, and why the thing that's fixed is the rule, not the number.
The doc stakes LMDA's story on usage burning supply. If burns quietly stop when convenient, the whole token note reads as weather-dependent. Whatever the rule is, some burn must be unconditional.
Development, data and infrastructure are paid in USDC. Every token burned is value deliberately retired — right when reserves are healthy, wrong if it would ever cut into the platform's ability to keep building through a full bear market.
The public line is explicit: the protocol never takes liquidity, only offers it passively on terms available to any holder. So protocol-held LMDA converts to USDC only when someone chooses to lift a resting ask — never on demand.
One rule for all LMDA inflow: usage spend and the LMDA-paid share of subscriptions route through the same splitter, so there's a single published mechanism instead of two. USDC-paid subscriptions bypass it entirely — they are the dependable USDC engine; passive ask fills in the liquidity book (section 05) add USDC on top when the market comes to meet them — welcome, never budgeted. Usage paid in USDC takes the simplest route of all: access is instant and the USDC joins reserves — payments are never swapped into LMDA.
Usage is priced in LMDA — that's what makes the supply sink real — but nothing forces you to hold it. Every payment settles instantly in whichever currency you choose; what differs is the route the money takes afterwards.
| You pay | Where it goes | Feeds the sink? |
|---|---|---|
| Subscription · USDC | Straight to reserves — funds development and the runway. | no — by design |
| Subscription · LMDA | Through the splitter — burn / lock, identical to usage. | always |
| Usage · LMDA | Through the splitter. | always — ≥25% burns |
| Usage · USDC | Access is instant; the USDC joins reserves and funds the runway. It is never converted into LMDA. | no — it funds the platform instead |
No swapping, ever: what you pay is what the platform keeps. USDC arrives and stays USDC, strengthening the reserves; LMDA arrives and is burned or locked — and after vesting it can only ever sit in a balanced, fully visible liquidity book. Both currencies are quoted at the same live rate — no bonus, no penalty, no preferred option; LMDA's role comes from what it does inside the platform, not from steering at the checkout. And the protocol never takes liquidity: no market orders, in either direction.
Define R = current USDC runway ÷ a 24-month target (both internal numbers). R selects one of three regimes, each with a fixed split. A regime changes only when R crosses a boundary and stays there for two consecutive monthly checks — so changes are rare, deliberate, and never a drip-feed of the balance sheet.
A ring-fenced allocation — vested LMDA on one side, allocated USDC on the other — quotes both sides of an on-chain order book, and the system strives to keep the resting quotes 1 : 1: for every ask clip, a matching bid clip, small and equal, laddered outward at fully visible price levels. The job is to thicken liquidity so anyone can trade LMDA with less slippage — and when the market lifts a resting ask, that is a passive sale at a visible level anyone could also have posted: USDC beyond what the book needs sweeps to the reserves on a published rule. One thing the book never does is chase: bids rest where they were placed and are not repriced upward — bid liquidity at higher levels only appears as new subscription USDC is allocated. What fills is the market's choice. Never a market order, never taking liquidity — the market comes to us.
Proposed starting values — the architecture holds if the numbers move. The runway target is the most consequential knob: it encodes how conservative the platform chooses to be. If you'd tune one of these, that's exactly the feedback we're asking for.
| Knob | Recommended | Why |
|---|---|---|
| Burn floor | 25% | Keeps "supply only shrinks with usage" unconditionally true — the credibility anchor. |
| Burn ceiling | 75% | Even flush, retain a quarter — reserve optionality is cheap when you don't need it and priceless when you do. |
| Regimes | protect 25 · rebuild 50 · flush 75% burn | Three fixed splits instead of a dial — the published number is a mode, not a reading of the balance sheet. |
| Boundaries | R 0.75 / 1.25 · must hold 2 months | Hysteresis makes regime changes rare and deliberate — no flickering around a target, no monthly drip of information. |
| Runway target | 24 months of opex | Long enough to survive a full bear market without touching anything token-related. |
| Cadence | monthly check · publish on change | The regime is re-evaluated every month and republished only when it actually flips. |
| Vest | 12 months · linear | Locked really means locked — long enough that retention can't be mistaken for a quick-sale queue. |
| Balance rule | 1 : 1 bid : ask · target | The system strives to match every ask with a bid — liquidity provision, not disposal, not buyback. The resting balance is verifiable on-chain. |
| Book funding | ring-fenced · vested LMDA + new subscription USDC | Asks from vested LMDA; bids from newly allocated subscription USDC — old bids are never repriced upward to chase the market. Excess USDC from ask fills sweeps to reserves on the published rule. |
| Quote shape | small equal clips · ±5% and out, both sides | Depth spreads across levels on both sides — the aim is no wall at best bid or best ask. |
| Book size | ≤5% of avg daily volume per side | The book is thicker for everyone without protocol orders ever dominating it. |
| Order type | post-only · on-chain Solana order book | The venue itself rejects any order that would take liquidity — the guarantee is structural, not procedural. |
| Payment rate | median short-window TWAP · bounded drift | LMDA- and USDC-quoted prices agree with the live market and can't be nudged by a brief spike in a thin book. |
| Burn timing | at consumption | Burns fire when usage happens, never on top-up — refundable balances are never part-burned. |
| Input discipline | trailing 12-mo opex · changes pre-announced | R's inputs can't be quietly steered: opex enters as a trailing average, and any change to the rule's definition applies one epoch after it's announced. |
Worth being clear-eyed about, because it's where a mechanism like this could quietly over-promise: ask fills in the liquidity book only happen when the market chooses to lift a resting offer — real USDC when it comes, but never counted on. What dependably funds the platform is simpler:
Together: subscriptions fill the tank, the regime keeps the tank from being drained into the burn address during a drawdown, and the liquidity book keeps the market tradable — converting reserve LMDA to USDC only when the market lifts a resting offer. One metric, one forbidden move (taking liquidity) — and no promises where the market decides.
"A portion of every LMDA spend is burned — never less than a quarter of it, permanently retired from supply. The remainder is time-locked and vests into a protocol-owned reserve over twelve months, where it can only ever rest as passive liquidity — visible bids and asks on a public order book, on the same terms available to any holder, never a market order. The balance between burn and lock follows a published rule with three fixed regimes tied to the health of the platform's reserves, and the current regime is always visible in-app."
Everything here runs against a published rule, with the LMDA side verifiable on-chain. The right question is whether that openness hands anyone an edge. Short answer: the caps and the passivity do the protecting — knowing the rule tells you nothing the order book wasn't already showing. The honest answer also names the places where the engineering has to be deliberate; those carry their own rows in the knobs table above.
| Attempt | Why it doesn't pay |
|---|---|
| Snipe the book's clips | Every order is public the moment it rests — the published rule reveals nothing the book doesn't. Small equal clips on both sides leave nothing worth trading against. |
| Push the price to milk one side | The book targets 1:1 and is capped per side — leaning on it fills a few small clips, bids never reprice upward to be milked on the way back, and the TWAP sanity check stops a manipulated print from re-anchoring the asks. The cost of moving the market exceeds anything the capped clips return. |
| Wash-usage to force burns | Spending LMDA on usage means paying full price for real product. The burn's benefit spreads across every holder pro-rata while the spender funds all of it. Self-defeating. |
| Time payments around the split | The split changes where the protocol routes tokens, never what a user pays. There is nothing on the paying side to time. |
| Cycle credits back to cash | Credits are non-transferable, non-refundable product value. There is no path from credits back to cash. |
| Pay-and-refund loops | Burns execute at consumption, not at top-up — a refundable balance is never part-burned. |
| Currency-choice arbitrage | Usage is quoted at a median-filtered short-window rate with bounded daily drift, so the LMDA and USDC prices always agree with the live market and a brief spike in a thin book moves nothing. A stale or naive in-app rate would be exploitable — which is why the rate is a named knob, not an afterthought. |
| Trade the regime change | Three fixed splits, boundaries with two-month hysteresis, published on a fixed schedule. There is no continuous signal to trade — and R itself is private. |
One guarantee is structural rather than procedural: every protocol order rests post-only on an on-chain Solana order book — an order type the venue itself refuses to execute against resting liquidity. "Never takes liquidity" is enforced by the exchange, not by trust. And everything else is verifiable the same way: the burn address, the lock program, and the 1:1 balance of the liquidity book are all public, order by order, any time.
Simple, but blind: it destroys value at the same rate whether the reserves are flush or thin — and durability through full cycles was the point.
The loudest sink and the most fragile platform: the runway becomes hostage to subscriptions alone, with no compliant fallback at all.
"We decide each month" invites the suspicion it deserves. A published rule removes the discretion argument before it starts.
Directly violates the public commitment and the compliance posture. Never on the table — listed so it's on record as considered and ruled out.
Converting incoming payments at the checkout — even passively — would make the protocol a counterparty to every payment and the sink compulsory. Dropped: what arrives as USDC stays USDC.
An earlier draft of this very page. Asks without matching bids read as disposal rather than liquidity, however passive. Replaced by the balanced book — same passive sales when the market lifts an offer, but the system strives to quote both sides.