# SDEX

## SmarDex: SDEX and Its Role in the Ecosystem

SmarDex is at the forefront of innovation in the [DeFi](/ultimate-synthetic-delta-neutral/the-usdn-protocol/glossary.md#decentralized-finance-defi) world, with numerous revolutionary projects in the pipeline. Each initiative is designed to transform the ecosystem by introducing new and efficient solutions. All these projects are, or will be, connected in some way to the [SDEX token](/ultimate-synthetic-delta-neutral/the-usdn-protocol/glossary.md#the-usdn-token), enhancing its value and utility within our ecosystem.

### Buy Back and Burn Mechanism

To support the value of SDEX, we have implemented a buy back and burn mechanism within the [USDN protocol](/ultimate-synthetic-delta-neutral/the-usdn-protocol/glossary.md#usdn-protocol), powered by two main sources:

1. 8% of each [funding rate](/ultimate-synthetic-delta-neutral/the-usdn-protocol/glossary.md#funding-rate) paid by the vault or long positions is used to purchase and burn SDEX.
2. During each USDN token [mint](/ultimate-synthetic-delta-neutral/the-usdn-protocol/glossary.md#mint), 5% of the minted USDN token amount is taken in SDEX to be burned. For example, minting 1,000 USDN tokens will burn 50 SDEX tokens ($0.66 as of release).

This mechanism strengthens SDEX valuation as the [TVL](/ultimate-synthetic-delta-neutral/the-usdn-protocol/glossary.md#total-value-locked-tvl) in the USDN token grows, reducing the circulating supply of SDEX and increasing upward pressure on its price.

### **Fair and Transparent Tokenomics**

Unlike many other projects, SmarDex has not reserved any tokens for founders or private investors. All participants, including the founders, have purchased their tokens fairly on the public market. This transparent distribution model ensures that there will be no selling pressure from future unlocks, preserving SDEX price stability over the long term.

For more information on token distribution and management, please refer to the [SmarDex Tokenomics](https://docs.smardex.io/overview/what-is-smardex/tokenomics) section.


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