GOCHI implements an 8% transaction tax on all $TOKEN token buy and sell transactions. This tax is the economic foundation of our sustainable care-to-earn model.

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Tax Breakdown

The 8% transaction tax is allocated across three key areas:

5% Rewards

Powers the SOL rewards distributed to active players based on their pet care quality and token holdings.

2% Liquidity

Automatically adds to and deepens the token’s liquidity pools, increasing price stability and reducing slippage.

1% Development

Funds ongoing development, infrastructure costs, and ecosystem growth initiatives.

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How The Tax Works

1

Transaction Occurs

A user buys or sells $TOKEN tokens on a decentralized exchange.

2

Tax is Applied

8% of the transaction amount is automatically withheld by the smart contract.

3

Tax is Distributed

The tax is split into three allocations: 5% to rewards, 2% to liquidity, and 1% to development.

4

Rewards Pool Filled

The 5% rewards allocation is used to purchase SOL, which enters the reward distribution pool.

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Rewards Pool Mechanics

The 5% tax allocated to rewards is the lifeblood of GOCHI’s care-to-earn system:

// Example of how hourly reward pools are calculated
function calculateHourlyRewardPool(dailyVolume) {
  // 5% of all transactions go to rewards
  const dailyRewardPool = dailyVolume * 0.05;
  
  // Hourly distribution (24 hours)
  return dailyRewardPool / 24;
}

// On $5M daily volume
// $5,000,000 * 0.05 = $250,000 daily rewards
// $250,000 / 24 = $10,416 hourly rewards

At 5,000,000dailytradingvolume,therewardsystemdistributesapproximately5,000,000 daily trading volume, the reward system distributes approximately 250,000 in SOL rewards daily to active players.

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Liquidity Enhancement

Automatic Liquidity

Half of the 2% (1%) is paired with SOL and added to the liquidity pool, deepening available liquidity.

Strategic Reserves

The other half (1%) is held in reserve for strategic liquidity injections during high volatility periods.

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Development Fund Utilization

The 1% development allocation is used transparently for:

CategoryAllocationPurpose
Core Development40%Server costs, contract improvements, feature development
Security25%Audits, security testing, and monitoring
Marketing20%User acquisition and community growth
Contingency15%Unexpected costs and opportunities

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Tax Exemptions

There are NO tax exemptions for regular users. All buy and sell transactions incur the 8% tax to maintain ecosystem fairness.

The only transactions exempt from the tax are:

  • Initial liquidity provision by the GOCHI team
  • Token distribution to pre-launch participants
  • Inter-wallet transfers (subject to daily limits)

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Tax vs. Price Impact

Transaction Tax

Fixed 8% on all transactions regardless of size.

Directed to ecosystem functions.

Applies to both buys and sells.

Price Impact

Variable based on transaction size relative to liquidity.

Larger trades have higher price impact.

Can be minimized by using limit orders or splitting trades.

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Sustainability Metrics

The tax system creates a self-sustaining ecosystem as long as:

Daily Volume × 0.05 ≥ Daily Reward Distribution

At our target minimum daily volume of $5M, the system can sustainably distribute rewards while maintaining economic balance.

The GOCHI tax system was designed after extensive modeling and research into successful and failed token economics models to ensure long-term sustainability.