> For the complete documentation index, see [llms.txt](https://docs.qie.digital/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://docs.qie.digital/qie-v3-tokenomics/deflation-mechanism.md).

# 🔥 Deflation Mechanism

### 🔥 Deflationary Mechanism of QIE

#### 📉 QIE Becomes Deflationary Over Time

QIE is designed with a built-in deflationary model, meaning the total circulating supply **gradually decreases** over time. Unlike inflationary tokens that continuously increase in supply and lose value, QIE becomes scarcer as adoption grows.

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#### 🔒 Fixed Supply, No Minting

* **Maximum Supply**: Capped at **150,000,565 QIE**
* **No Minting After Cap**: No new QIE can be minted once this cap is reached
* **Reward Reserve**: 66 million QIE are reserved for validator and delegator rewards over a span of over next **100 years**

> This ensures a **predictable and finite total supply**, removing inflation risk.

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#### 🔥 Burn Mechanism

QIE uses a **fee burn mechanism**, designed to automatically reduce supply based on network usage.

**How It Works:**

* Every transaction includes a **Base Fee** (mandatory), which:
  * Is dynamically adjusted based on **network congestion**
  * Is **permanently burned** (removed from circulation)<br>

**🔢 Burn Fee Formula**

Burned Fee=Base Fee×Gas Used

* **Base Fee**: Automatically adjusted per block
* **Gas Used**: Gas consumed by the transaction
* **Burned Fee**: QIE removed from the total supply forever

**Example**:\
If the base fee is `0.0005 QIE` and the transaction uses `21,000 gas`:

Burned Fee=0.0005×21,000=10.5 QIE

> This 10.5 QIE is permanently burned, contributing to supply reduction.

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#### 🔁 Daily Emission with Built-In Burn

Each day, QIE manages rewards and burns through the following process:

* Validator/delegator rewards are distributed from the **emission pool**
* **Base fees from all transactions are burned**
* The **net effect**: supply grows more slowly, while burn increases with network activity

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#### 🧮 What This Means for You

As QIE adoption increases:

* ✅ **More transactions** = more base fees burned
* ✅ **Halvings** reduce the speed of new coin emissions
* ✅ **Total supply** shrinks while demand grows

> The result is a long-term deflationary model designed to support **scarcity and value appreciation**.