The burn rule
Every protocol fee on the EDMA settlement rail follows the same split: 50% burned in $EDM, 50% routed to the treasury. The burn happens atomically in the same transaction as the EMT mint and the tranche release. There is no batched burn, no monthly settlement, no governance vote on when to burn. The contract burns the moment the fee is collected.
The protocol fee itself is 0.5% on each milestone tranche, subject to per-tranche caps by deal size (capped at $5K up to $1M order value, $25K up to $5M, $50K above). The fee is paid in EDSD at settlement, then converted by the protocol’s burn engine to $EDM via the on-chain liquidity pool, half of which is burned, the rest of which routes to the treasury wallet.
Marketplace-matched deals also pay a 0.25% marketplace tier fee on financed principal at each repayment event, paid by the financier. Same 50/50 split: half burns, half routes to treasury. Externally-sourced deals do not pay the marketplace fee.
0x9c1f…3a82 recorded on the Receipt. Removes $EDM from circulating supply; cannot be redirected or eliminated by governance.Treasury split and governance bounds
The 50% that routes to the treasury covers the protocol’s operating costs and growth investments. Default allocations: validator rewards (PoV attestors who sign correctly earn rewards from this bucket), ecosystem grants (developer grants, integration bounties, audit subsidies for new attestor onboarding), operational reserve (legal, compliance, infrastructure, security audits).
These allocations are governance-adjustable within published bounds via 72-hour timelock. Bounds are explicit: validator rewards cannot fall below 20% of the treasury share or rise above 60%; ecosystem grants cannot fall below 10% or rise above 40%; operational reserve cannot fall below 10% or rise above 50%. The bounds were set in the constitution at protocol launch and themselves require a constitutional amendment (90% vote, 30-day timelock) to change.
The 50% burn floor is not adjustable. Governance cannot lower it. This is a constitutional invariant alongside no-EMT-no-funds and must-fund-before-shipping. The burn is the protocol’s commitment to $EDM holders that rail growth flows into token deflation, permanently.
Why it matters: fee flow becomes supply flow
$EDM total supply at TGE is 1 billion tokens. The burn mechanism translates rail activity directly into supply contraction. The math is mechanical: every settlement event burns a fraction of a $EDM (the exact amount depends on EDSD-to-EDM conversion at burn time). Aggregate that across the projected settlement volume and the supply curve bends downward.
Volume scenarios. Conservative: $500M annual settlement volume across the network, average 0.5% fee yields $2.5M in fees, 50% burns yields $1.25M $EDM burned per year (at $1 per token, 0.125% supply contraction). Moderate: $5B annual settlement volume, $25M in fees, $12.5M $EDM burned per year (1.25% supply contraction at $1). Aggressive: $50B annual settlement volume, $250M in fees, $125M $EDM burned per year (12.5% supply contraction at $1). These are illustrative volumes; the actual trajectory depends on Stage 3+ adoption.
The flywheel: more deals settle on the rail, more $EDM burns, supply tightens. If demand for $EDM holds (governance rights, validator staking, fee payment) and supply contracts mechanically, the structural pressure on price is upward. This is the deflationary thesis: not a marketing claim, a contract-level mechanism. The presale page details current price tiers and the listing roadmap.
