Reflexive strategy¶
A token that pays its holders in itself. Every hour, its fees buy it back on its own pool, and what they buy lands in every holder's wallet, in proportion to what each one holds.
8 points of every trade wait as ETH for the next airdrop.
The waiting ETH buys the token back on its own pool.
Each holder is owed a share, in proportion to their balance.
Sweep's keeper sends every share. Holders do nothing.
There is no target, no treasury, no bid and no shelf. The whole machine is a buyback and a ledger.
Like every strategy, a reflexive strategy starts on its own bonding curve and graduates into its pool at 4.2 ETH (The curve). Trades on the curve pay 2% royalty and 1% to Sweep, and nothing waits for an airdrop, so the first airdrop comes within the hour after graduation. Anyone who buys on the curve is a holder from their first buy, and shares in every airdrop from then on.
The buyback¶
Fees wait as ETH. Sweep's keeper runs the airdrop once an hour, as soon as at least 0.001 ETH is waiting. Anyone can run it sooner. Sweep can raise that minimum, up to 1 ETH, so an hour on a quiet token does not buy dust.
The buyback spends everything waiting on the token's own pool, like any other buy. It pays the fee like any other buy too: 9 of every 10 tokens bought go to holders, and the 10th becomes fees, 8 points of which wait for the next hour.
The ledger¶
What the buyback brings is shared among holders in proportion to the balance each one holds at that moment.
The ledger is settled every time a balance moves, so there is nothing to time. A wallet that buys a minute after an airdrop gets nothing from that airdrop, and earns from the next one. A wallet that sold a minute before gets nothing from it. Whoever runs the airdrop decides when, never who gets what.
Who never gets a share¶
Some addresses hold the token without being holders. They are left out of every airdrop:
| Address | Why it holds tokens |
|---|---|
| the curve | it is the market before graduation, and holds the unsold supply |
| the pool | it is the market after graduation |
| the dead address | burnt tokens, including those burnt at graduation |
| the launch contract | it holds the curve's tokens for an instant, at graduation |
| the fee hook | it holds a buy's fee for an instant |
| the router | it holds the buyback for an instant |
| the strategy | it holds shares until they are sent |
The list is fixed at launch. Nobody can add a wallet to it later, because an adjustable list is exactly how airdrop tokens have been drained: exclude everyone but yourself, and every share is yours. The one addition possible is a new buyback router, and only one Sweep's launch contract already lists.
Delivery¶
After each airdrop, Sweep's keeper sends every share, 200 wallets per transaction. Holders do not sign or claim anything; their balance simply grows.
A share smaller than 0.000001 of a token stays in the ledger until it grows large enough to send. Any holder can also claim their own share at any time, so an airdrop is never lost if the keeper stops.
If nobody holds the token outside the pool at the moment of an airdrop, what was bought is kept for the next one.
Example¶
With made-up figures
- $LOOP has graduated and trades 20 ETH in an hour in its pool. At 10%, that is 2 ETH of fees: 1.6 ETH wait for the airdrop, 0.2 ETH of royalty go to the launcher, 0.2 ETH to Sweep.
- Outside the pool, 200,000,000 $LOOP are held. Ana holds 30,000,000, Ben holds 10,000,000, and everyone else holds the other 160,000,000.
- The hour comes. The 1.6 ETH buy $LOOP on its pool, and 18,000,000 $LOOP reach the ledger after the fee.
- The ledger shares them by balance: Ana holds 15% of what is held, so she is owed 15% of the 18,000,000.
- The keeper sends every share. Ana now holds 32,700,000 $LOOP, without having signed anything.
- Carla buys 5,000,000 $LOOP a minute later. She receives nothing from this airdrop and her share of the next one is counted from her full balance.
| Holder | Holds | Share | Receives |
|---|---|---|---|
| Ana | 30,000,000 | 15% | 2,700,000 |
| Ben | 10,000,000 | 5% | 900,000 |
| Everyone else | 160,000,000 | 80% | 14,400,000 |
What it is not¶
Not a reflection token. Balances never change by themselves. Every token a holder receives was bought on the open pool with real fees, and arrives as a plain transfer.
Not a dividend. Holders are paid in the token, not in ETH, and hold no claim on anything the strategy has.
Not free to move. The token is locked to its pool like every strategy token: it cannot be sent from one wallet to another. See The token.
Launching one¶
Anyone can launch a reflexive strategy, and there is no limit on how many exist. It needs a name and a ticker, nothing else.
The royalty goes to the launcher, and that can never be changed: there is no collection or token owner who could ever claim it.