Xi employs aggressive buyback-and-burn mechanisms to support the $XI token value.
Xi essentially recycles platform value back into the token: fees are used to reward stakers and burn tokens, AI usage burns tokens, participation incentives eventually lead to burns (since recipients either stake or use tokens, which triggers burns). The design protects against unchecked inflation or continuous dilution, a common problem in other ecosystems.
Xi Platform's Transaction Burns
For the first 24 months post-launch, 25% of every on-chain $XI transaction is burned. This effectively acts as a transfer tax on $XI movements: whenever $XI is sent, traded, or used for fees/credits on-chain, one-quarter of the amount (or equivalently 0.25% of the total value if thought of relative to the 1% fee) is destroyed.
For example, if a user transfers 1000 $XI, 250 $XI (25%) would be burned – although realistically, this applies to transactions like trades or credit purchases rather than manual P2P sends (which may be exempt if off-chain or internal). The intent is: the higher the transacted volume of $XI, the greater the burn. At high usage, this can be substantial; e.g., at $10M daily $XI volume, about $25k worth of $XI burns daily (~$750k monthly). This 2-year intensive burn period jumpstarts deflation when the token is newly issued and more plentiful. It also encourages holding $XI (since transferring it “costs” 25% in burn initially, though likely many transactions will be internal netting, so not all user transfers are taxed).
Continual Buybacks from Fees
As noted, 25% of all Trading Agent volume fees are allocated to buy back and burn $XI. Every time someone trades an Agent, 0.25% of their trade value goes into a routine where Xi’s smart contracts (or treasury ops) purchase $XI from the open market and send it to a burn address. This creates constant buy pressure proportional to platform trading volume.
Importantly, this ties $XI’s demand directly to actual usage: if trading volume surges, the buybacks accelerate, which can stabilize or boost $XI’s market price and offsets sell pressure. It’s like the platform itself is an automatic, protocol-driven buyer of $XI on every user trade. Over time, these buybacks cumulatively remove a large number of tokens from circulation, especially as trading volume grows into the billions.
Long-Term Deflation Schedule
After the initial 2-year burn tax ends, Xi plans a controlled, algorithmic burn to gradually reduce total supply to 50% of the original (i.e. down to 1 billion $XI). The protocol will implement an automatic burn formula beyond year 2,
Q = V × P × K – where V is transaction volume, P is price, and K is a constant tuned to achieve the desired deflation rate.
Essentially, Xi will burn tokens at a pace calibrated to reach the target of halving the supply over some years, while accounting for actual usage and token value (so as not to over-burn or under-burn). This dynamic approach is more flexible than a fixed tax: as volume and price change, the burn adjusts to maintain a consistent deflationary trajectory, without starving the system of liquidity. It represents a shift from the initial blunt tax to a more sustainable burn mechanism as the ecosystem matures.
Strategic Additional One-off Burns
In addition to automated mechanisms, Xi’s team may execute strategic one-off burns in specific situations, such as eliminating unused token allocations (e.g., unsold tokens or inactive partnership reserves), burning excess treasury funds during periods of low demand, or increasing buybacks to support price stability.
These discretionary actions serve as flexible levers to reinforce token scarcity, protect market confidence, and demonstrate long-term commitment to value creation for holders.
This means that as Xi’s adoption grows, $XI will become increasingly scarce.
Coupling that with staking (locking tokens up) and incentives for holding (VIP tiers), a scenario is created where circulating supply available on the market diminishes relative to total supply and demand.