Penalties & Deflation

MONSTRO’s supply naturally decreases over time through on-chain mechanics, without taxes, minting, or artificial gimmicks.

Early Withdrawal Penalty (Real-Time Decay)

Staking MONSTRO applies a 2-year, real-time, per-second decaying penalty.

  • At the moment you stake, the maximum penalty is 75%.
  • Every second, the penalty decreases.
  • At exactly 2 years, the penalty reaches 0%.

If you withdraw early, the penalty applies only to the amount withdrawn.

Penalty Distribution

Every penalty is burned in full (100%), permanently removing it from supply.

Before MIP-1, penalties were split 50% burned, 25% to the DAO treasury and 25% back to the emissions pool.

Every early exit permanently reduces the supply held by everyone who stays.

Expired Allocation Burns

Legacy allocations that are never claimed are burned in full. The last claim window closes on January 27, 2027, when about 65.7M unclaimed MONSTRO is expected to be burned.

This prevents unused allocations from ever becoming circulating supply.

No Minting, No Inflation

MONSTRO uses a strict fixed-supply model:

  • No mint function
  • No inflation
  • No transfer taxes
  • No hidden supply changes
  • Token ownership renounced

Supply can only decrease, never increase.

What Drives Deflation

Deflation occurs entirely through natural user behavior:

  • Early withdrawals: every penalty is burned in full
  • Expired auto-stake allocations, burned in full
  • DAO stake rewards: everything the DAO's own stake earns is burned each month
  • DAO bid: a share of Based Loans fees buys MONSTRO below the market price and burns it
  • xMONSTRO mints: 75% of every mint is burned
  • Optional voluntary burns
  • Future DAO burn proposals

There are no forced burns, no gimmicks, and no artificial market manipulation. Only transparent, predictable, on-chain events.

Summary

MONSTRO becomes increasingly scarce over time through:

  • A 2-year real-time decaying penalty
  • Burn events from expired allocations
  • A fixed supply with no minting
  • Penalties burned in full

As the ecosystem grows, so does the rate at which penalties and expiries contribute to long-term deflation.