Inferno
Open app

Chapter 02

How it works

This chapter is the whole protocol in one read. Nothing here is simplified to the point of being wrong, but everything here is covered again, slowly, later.

One pass

  1. A launch. Someone calls LaunchFactory.launch with a name, a ticker, a model id and some ETH. Out come a ModelToken, a RevenueVault, and a Uniswap V2 pair.
  2. Supply. One billion units are minted once and put into the pair — all of them. Nobody receives a free allocation. A creator who wants a stake buys it at market price, in the same transaction, out of the pool they just created.
  3. Liquidity. The LP tokens are minted straight to the burn address. The pool cannot be withdrawn by the creator, by us, or by anyone.
  4. Trading. A buy or a sell routed through TradeRouter pays 1% of its ETH side into that token's vault, and swaps the rest on the pair. Trading the pair directly on Uniswap skips the fee entirely.
  5. Buyback and burn. Anyone can call buybackAndBurn. The vault spends its ETH on the token's own pair and burns everything it buys. totalSupply falls by exactly that much.

Where the money moves

Two flows, and they do not cross. The trader pays the fee and gets what the pool gives for the rest. The vault receives that fee and can only ever spend it on its own pair, ending in a burn.

Trader pays
1% of the ETH side, routed through the interface
Vault receives
That fee, and anything anyone sends it directly
Vault spends on
Its own Uniswap V2 pair, then burns
Creator receives
Nothing. Their stake is bought, not granted
We receive
Nothing from a trade. See the fees chapter

What is fixed

Settled at deploy and changeable by nobody, including us: the supply, the model id on the token, the burned liquidity, and the fact that a vault's only exit is a burn. The fee rate is fixed for a given TradeRouter at its deploy, with a ceiling of 3% written into the contract rather than promised here.

What does not happen

No tokens are minted after deploy. No holder is paid. Nothing is locked or vested by the protocol. The vault does not hold the model token between transactions, only ETH, and cannot transfer ETH to an address of anyone's choosing. If nobody trades a token, its vault stays empty and nothing is ever burned — which is the ordinary case for most tokens, not an edge one.