> For the complete documentation index, see [llms.txt](https://litepaper.karatgalaxy.io/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://litepaper.karatgalaxy.io/tokenomics/abouttoken.md).

# KARAT

<figure><img src="/files/dx2dGJO40HTkUWz9zFr6" alt="" width="180"><figcaption><p>KARAT token</p></figcaption></figure>

### **Total Supply**

* 100 million tokens in total, and no more will ever be minted. A limited-edition treasure!

### **Initial Distribution**

* All 100 million KARAT tokens are initially placed in a liquidity pool with CAKE tokens, setting the initial price at 0.001 CAKE/KARAT.

### **Transparency**

* The KARAT smart contract is open source on BSC Scan.

### **Liquidity pool**

* PancakeSwap V3.

### **Auto Buyback**

* 20% of daily game revenue in CAKE tokens is automatically burned by PancakeSwap Gaming Marketplace. The remaining 80% of CAKE tokens are used for buying back KARAT tokens from the liquidity pool.

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<figure><img src="/files/qDJh8glEdmLoOO5yFwJy" alt=""><figcaption></figcaption></figure>

### The Buyback Breakdown

20% of bought-back tokens are burned to dust.&#x20;

35% goes to daily mines for fair distribution based on hash power.

25% of the team's total equity is allocated to the DeFi pool for dividend distribution.

20% remains as team rewards, supporting ongoing development and operations.

***

### **Example of the Burn Mechanism**

Let's say our game generates 1,000 CAKE in revenue for the day. Here's what happens next:

1. **Burn 20% (200 CAKE)**\
   200 CAKE tokens are burned, reducing the total supply and increasing the value of each remaining KARAT.
2. **Use the remaining 80% (800 CAKE) to buy back Karats**\
   Based on the real-time price in the liquidity pool, let's illustrate with an example of purchasing 100,000 Karats.
3. **Distribution of Bought-Back KARATs (100,000)**
   * **20% (20,000 KARATs) burned**\
     These KARATs are permanently removed from circulation, ensuring more valuable KARAT.
   * **35% (35,000 KARATs) to daily mines**\
     Added to the daily mining pool, available for players to earn based on their hash power.
   * **25%(25,000 KARATs)to the DeFi pool**
   * **20%(20,000)as team rewards.**

*The buyback allocation has been adjusted to enhance operational efficiency and support our expanding ecosystem. We have divided the ecosystem fund into five specific areas (Eco-1 to Eco-5) with detailed plans currently in development and to be announced.*

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{% hint style="success" %}
Open public purchase after 7M Karats are burned
{% endhint %}