Sink Mechanics
How ARC tokens and Arcanite are removed from circulation to maintain value.
Token sinks are mechanisms that permanently remove tokens from circulation. Without effective sinks, any token economy eventually suffers inflation as supply continuously grows while demand fluctuates.
Why Sinks Matter
| Without Sinks | With Sinks |
|---|---|
| Supply only increases | Supply can decrease |
| Value dilutes over time | Scarcity maintained |
| Early players dumping on new | Aligned long-term incentives |
| Death spiral during downturns | Stability through deflation |
Target: 3-5% annual deflation after Year 2
ARC Token Burns
Transaction Fee Burns
| Transaction Type | Burn Rate |
|---|---|
| Arcanite → ARC Conversion | 2% of ARC received |
| ARC Marketplace Sales | 2.5% of sale price |
| ARC Premium Purchases | 100% burned |
Example: Player converts 1,000 Arcanite at 100% rate
- 10 ARC generated
- 0.2 ARC burned (2%)
- 9.8 ARC delivered to player
Marketplace Burns
When items are traded for ARC on the marketplace:
- Seller lists item for 100 ARC
- Buyer pays 100 ARC
- 2.5 ARC burned from sale
- Seller receives 97.5 ARC
Projected Annual Impact: 1-2% of circulating supply
Premium Feature Burns
Certain ARC purchases are 100% burned rather than collected:
| Feature | ARC Cost | Burn % |
|---|---|---|
| Name Change | 50 ARC | 100% |
| Guild Creation | 100 ARC | 100% |
| Exclusive Cosmetics | Variable | 50% |
Arcanite Sinks
Arcanite sinks reduce the amount available for conversion to ARC:
Marketplace Fees
| Transaction | Fee | Destination |
|---|---|---|
| Arcanite item purchase | 5% | Removed |
| Arcanite listing fee | 1% | Removed |
Consumable Sinks
| Item Type | Arcanite Cost | Notes |
|---|---|---|
| Premium Crafting Boost | 50-200 | +10% success chance |
| Boost Extensions | 100+ | Extend active boosters |
| Cosmetic Upgrades | 50-500 | Permanent visuals |
One-Time Sinks
| Feature | Cost | Frequency |
|---|---|---|
| Character Name Change | 200 Arcanite | Per change |
| Additional Character Slot | 500 Arcanite | Per slot |
| Guild Name Change | 300 Arcanite | Per change |
Burn Tracking
All burns are publicly verifiable:
On-Chain Verification
- Burn transactions sent to dead address
0x000...dead - Viewable on blockchain explorer
- Real-time burn counter on website
Reported Metrics
| Metric | Update Frequency |
|---|---|
| Daily Burns | Every 24 hours |
| Weekly Burns | Every Monday |
| Total Burned (All Time) | Real-time |
| Circulating Supply | Real-time |
Projected Deflation
With 6-month halving plus tail emissions, supply growth slows rapidly:
Year 1 (Growth Phase)
- Emissions: ~22.5M ARC (2.5M/mo H1 + 1.25M/mo H2)
- Burns: ~2-4M ARC
- Net: Inflationary (growing ecosystem)
Year 2 (Transition)
- Emissions: ~7.5M ARC (625k/mo H1 + 500k/mo tail starts H2)
- Burns: ~4-6M ARC (mature marketplace)
- Net: Near neutral to deflationary
Year 3+ (Deflationary)
- Emissions: 6M ARC/year (500k/mo tail)
- Burns: ~6-8M ARC
- Net: 3-5% annual deflation
Note
Deflation targets assume healthy player base and conversion activity. The Oracle adjusts conversion rates and weekly caps based on economic health indicators to maintain sustainability.
Comparison: Successful vs Failed Sinks
Failed: Axie Infinity (SLP)
| Sink | Effectiveness |
|---|---|
| Breeding | Only meaningful sink |
| Problem | Breeding created more earning Axies |
| Result | Supply grew 4x faster than burns |
Successful: Decentraland (MANA)
| Sink | Effectiveness |
|---|---|
| Land purchases | 100% burned |
| Marketplace fees | 2.5% burned |
| Result | 22% of original supply burned |
Arcania Approach
Multiple independent sinks ensure no single mechanism can fail:
| Sink Category | % of Total Burns |
|---|---|
| Conversion fees | ~30% |
| Marketplace fees | ~40% |
| Premium features | ~20% |
| Cosmetics/upgrades | ~10% |
Player Impact
For Active Players
Sinks are designed to feel fair:
- Fees are predictable percentages
- Premium features are optional
- Core gameplay unaffected
- Patient players minimally impacted
For Token Holders
Deflation benefits holders:
- Reduced supply increases scarcity
- No unlimited inflation diluting value
- Aligned incentives with ecosystem health
- Long-term value proposition