> For the complete documentation index, see [llms.txt](https://smily.gitbook.io/smily-docs/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://smily.gitbook.io/smily-docs/fees-burn-and-deflation.md). # Fees Burn and Deflation ## The split, every time Every pot, in every format and at every tier, is divided the same way. * **97% to the winners.** * **2% burned.** Removed from supply permanently, denominated in $SMILY, taken directly from the pot. * **1% operating revenue.** Funds operations, the team, and marketing. This is lean for the category. Poker rake is frequently 5% or more. Returning 97% of every pot is a generous, transparent, and ownable position: the house takes only 1%, burns 2% for holders, and gives 97% back to players. ## Why the burn is direct The recommended mechanic is a direct burn of 2% from the $SMILY pot, plus 1% to operating revenue. A separate buyback engine is not required at launch, because buy pressure already occurs on every entry. USDC is swapped to $SMILY on the open market to fund the buy-in, so the buying happens at the door. The direct 2% burn on top of that is simple, honest, and on-brand. An explicit buyback-and-burn can be added later using operating-revenue surplus once the platform is profitable. ## Deflation is mechanical, not a narrative The token does not need a story to get scarcer. It deflates as a pure function of activity. Supply is fixed at one billion, there is no minting, and 2% of every pot is destroyed. The only way supply moves is down, and the rate is set by how much the game is played and at what tier. A single worked case shows the link. A Gold eight-player Sit and Go has a pot of 800,000 $SMILY, of which 16,000 $SMILY is burned. Every such room removes 16,000 $SMILY from existence. Multiply that across many rooms, many tiers, and continuous play, and the burn compounds. More volume burns more. Bigger tiers burn more. The game is the burn engine. ## The throttle is the tiers Because the burn is a fixed percentage of the pot, the size of the burn is governed by the size and frequency of the pots, which is governed by the [Buy-in Tiers](broken://pages/55cccb7fd021f3c0e9ebfe532090b94433233bc0). This is deliberate. The tiers are the throttle on deflation, and they connect the activity of the game directly to the scarcity of the token. ## Who the 1% pays The 1% operating revenue is what makes the 100% community distribution sustainable. There is no treasury buffer and no pre-mine, so the recurring 1% is the funding source for operations, the team, and marketing. It scales with volume, which means the operation is funded in proportion to how much the game is actually used. The full funding model is in [$SMILY Token Economy](broken://pages/b93a890ecf99296b570ae8067bb712a1966e1941). --- # Agent Instructions This documentation is published with GitBook. GitBook is the documentation platform designed so that both humans and AI agents can read, navigate, and reason over technical content effectively. Learn more at gitbook.com. ## Querying This Documentation If you need additional information that is not directly available in this page, you can query the documentation dynamically by asking a question. Perform an HTTP GET request on the current page URL with the `ask` query parameter, and the optional `goal` query parameter: ``` GET https://smily.gitbook.io/smily-docs/fees-burn-and-deflation.md?ask=&goal= ``` `ask` is the immediate question: it should be specific, self-contained, and written in natural language. `goal` is optional and describes the broader end goal you are ultimately trying to accomplish on behalf of the user. GitBook uses it to tailor the answer towards what is most useful for that goal. The response will contain a direct answer to the question and relevant excerpts and sources from the documentation. Use this mechanism when the answer is not explicitly present in the current page, you need clarification or additional context, or you want to retrieve related documentation sections.