# Burn $PEPAY

<figure><img src="/files/J4TzKhkAzx5f5yZptsyO" alt=""><figcaption></figcaption></figure>

When a user burns (sells to contract) $PEPAY, the $PEPAY tokens are burned, and the $PEPE is returned to the user based on the current backing ratio (which can only go up over time.)

Result: $PEPAY Vault increases, the backing price goes up in $PEPE. $1 in $PEPAY is burned but $.90 in $PEPE is returned, so that the backing increases more than the token inflation.


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