I would like to discuss why Tradao (TOD) must have a Buy and Sell Tax.
Normally these kind of taxes are considered gimmicky or band aid solution and generally frowned upon.
But let me explain why taxes are essential to Bonding/DAO protocol.
The main aim is grow a treasury which used to back a reserve currency.
So how do Buy and sell taxes benefit growing a treasury?
Buy taxes, incentives bonding rather than purchasing from the open market.
Sell taxes incentivise continued staking, less sell pressure.
That's it? NO! It gets better so keep reading...
For example if TOD was in an uptrend, and an investor wanted access to price appreciation and high APY instantly, they have to buy with a tax of (2.5%).
This will help grow the treasury, without anyone bonding!
Now sell tax (10%), lets assume we are still in that uptrend in price and investors are taking profits, as they do!
This normally hurts a protocol, not with a sell tax!
Profit taking helps grow the treasury.
Now lets assume we are in a down trend, where there is more selling than buying.
As the price comes down, the treasury is growing!
So regardless of market conditions, UP or DOWN the treasury is growing.
Buy and Sell Taxes are healthy and essential to growing a large treasury.
Thanks for reading!