Initial. So, let's break it down and make up some numbers to make it easier. Let's say the LP is:. LP: 1000 DIQ / 1000 BNB.
10 Jan 2022, 18:08
Initial
So, let's break it down and make up some numbers to make it easier. Let's say the LP is:
LP: 1000 DIQ / 1000 BNB
Price: 1 BNB = 1 DIQ (it would be 2 but let me take liberties)
Buy
If "Person A" was to buy 100 DIQ, it would cost them 100 BNB. They would only receive 95 DIQ because of the 5% house tax. The balances now look like:
LP: 900 DIQ / 1100 BNB
Person A: 95 DIQ
Price: 1.22 BNB = 1 DIQ
Sell
Now, "Person A" is a paper hand and decides to sell his tokens straight away. Out of his/her tokens, 30% are going to be taxed by the contract and never hit the LP so he/she will effectively be selling 66.5 DIQ and therefore receiving 81.13 BNB. The balances now look like:
LP: 966.5 DIQ / 1018.7 BNB
Person A: 0 DIQ
Price = 1.054 BNB = 1 DIQ
Result
Notice the price increase due to the tokenomics? This is the beauty of the burn, the price floor increases when the paper hands sell causing the holders to benefit long term.