> For the complete documentation index, see [llms.txt](https://ultraroundmoney.gitbook.io/ultraroundmoney/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://ultraroundmoney.gitbook.io/ultraroundmoney/urm/key-burn-mechanism-of-the-ultraround-money-token.md).

# Key Burn Mechanism of the Ultraround Money Token

### Core Mechanics 

* **Circular Burn Loop (CBL) —** The protocol deposits Ultraround Money token and WETH into Uniswap v3’s concentrated liquidity pools. As external trades generate fees, a smart contract claims rewards.\
  \
  Of these rewards, 90% of the earned WETH is reinvested into the pool, and the remaining 10% covers gas fees. Claimed fees are always burned (sent to the burn address), reducing the circulating supply of the token over time.
* **Dynamic Burn Rate —** URM’s Chaos Engine monitors price and market conditions. During price declines, it can accelerate token burning by calling a special “causeChaos” function, releasing stored WETH to trigger rapid transactions.\
  \
  These rapid transactions result in extra token burns that help to counter sell pressure. During price uptrends, it slows down to accumulate more fees, maximizing potential strength for future defense.

### Buying Ultraround Money Token

* You can use a DEX like Uniswap v3 (on the Base L2 network) to buy Ultraround Money with ETH (or WETH) at the current market price.
* Your trade happens within a liquidity pool containing Ultraround Money and WETH, provided by both the protocol (the Chaos Engine) and other liquidity providers.
* **You do not pay any buy tax or extra burn fee for your trade.** The price you get is purely what’s in the pool, minus a tiny DEX fee (not a project fee).​
* This trade generates a normal swap fee (collected by the pool), which is later claimed by the protocol’s own liquidity position.

### What happens in the Background?

* The Chaos Engine (protocol smart contract) periodically collects trading fees (earned in WETH or URM) from its liquidity positions (NFTs in Uniswap v3).
* 90% of WETH from fees is put back into the liquidity pool (helping with more trades in the future); 10% goes to a deployer wallet for gas and maintenance costs, never to individuals.
* Any URM gathered from fees is automatically sent to the burn address—**permanently removing it from circulation**. This process is called the Circular Burn Loop (CBL).​
* Over time, as trading continues, this keeps reducing URM’s supply, making each remaining token slightly more scarce and potentially more valuable for holders.

### Selling URM

* When you choose to sell Ultraround Money, you initiate a swap in the same Uniswap v3 pool, trading URM for ETH/WETH at the available pool rate.
* **Again, there is no sell tax.** The only deduction is the small Uniswap v3 fee.
* Your sale increases volume, which helps the Chaos Engine accumulate more protocol-owned fees. Later, these fees will be claimed and used to burn more URM via the Circular Burn Loop.
* You get your ETH/WETH instantly at market rates (minus swap fees) and are free to move or reinvest it as you wish.​

### Competitive Advantage Vs. Other Deflationary Tokens

| Feature               | Ultraround Money                      | Other Models                         |
| --------------------- | ------------------------------------- | ------------------------------------ |
| Funding for Burns     | Protocol-generated fees (CBL)         | User-paid transaction taxes          |
| Effect on Traders     | No penalty, frictionless trades       | Fee on every trade, reduced activity |
| Market Responsiveness | Dynamic (accelerates in bear markets) | Static (fixed % per buy/sell)        |