> For the complete documentation index, see [llms.txt](https://pepay.gitbook.io/whitepaper/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://pepay.gitbook.io/whitepaper/overview/tokenomics.md).

# Tokenomics

## $PEPAY Only Goes Up (Actually - In $PEPE)

The unique combination of contract minting/burning and the 10% transaction tax allows $PEPAY to mathematically guarantee that the backed, contract price in $PEPE can only go up - even when there is heavy sales volume. The mechanism of reducing supply (burning) while simultaneously increasing $PEPE backing ensures that the value of $PEPAY will increase even when it is being sold. This counteracts the usual price depreciation associated with selling pressure, making $PEPAY a token that only goes up in $PEPE value.

No matter when you cash out your $PEPAY for $PEPE, it is guaranteed to be more than you cashed in.

## Both mints (purchases) and sales (burn) carry a 10% tax that is distributed as follows:

<figure><img src="/files/4Qzp0fPAI9tIXTjiSeGN" alt=""><figcaption></figcaption></figure>

1. 6% to Contract Backing ($PEPE price always goes up)
2. 2% to LP staking rewards (rewards to LP providers in the $PEPAY/WETH pair - incentivizing a large LP is important to allow profitable arbitrage in large size that turbocharges $PEPAY's $PEPE backing.)
3. 1% to operating expenses - marketing, future audits, dapp dev, hosting, etc.
4. 1% to the $PEPAY team