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Why is a supply shock inevitable for $CULT?
$CULT DAO's treasury mechanism is a self-reinforcing, deflationary loop designed to trap $CULT tokens in the treasury through transaction taxes, with built-in scarcity effects that accelerate on higher volume and price.
How high volume traps supply in the treasury?
Higher trading volume = way more transactions = way more 0.4% taxes collected in $CULT tokens.
Each tax pull removes $CULT from the circulating supply and locks it in the treasury (until a release through passed proposal).
This creates immediate sell pressure reduction and scarcity. The 2022 data showed this clearly: during volume spikes, the treasury accrued tens of billions of $CULT (equivalent to 130+ $ETH in one period) faster than proposals could release it.
How price increases amplify the trapping?
The release is fixed in $ETH value, not fixed in token count.
When the contract takes $CULT out of the treasury to hit the 15.5 $ETH disbursement:
- At a higher $CULT price, it needs to pull out far fewer actual $CULT tokens to equal 15.5 $ETH worth.
-Example: If $CULT = $0.00001, you might need ~1.55 billion CULT to make 15.5 $ETH. If $CULT moons to $0.0001 (10x), you only need ~155 million $CULT for the same 15.5 $ETH value.
Meanwhile, the inflow (0.4% taxes) is still pulling in full $CULT tokens based on volume.
So: more volume → more $CULT in. Higher price → less $CULT out per release cycle.
Net result: the treasury's $CULT balance grows even faster. Circulating supply shrinks harder. This pushes price up further → even less $CULT released next cycle → even more trapping. It's a virtuous deflationary spiral.
Now here is where the madness kicks in:
$CULT is a gas token of @ModulusZK this is want happens when someone needs $CULT as gas:
x amount of $CULT bought, the amount of $CULT gets taxed 0.4% trapping supply ans then it gets burned as gas
so there is two very powerful scarcity enginering mechanism taking place at the same time both thriving on volume and the catalysts for this volume is:
- #CultDAO tokenomics \
- @ModulusZK
- BitLogic
- 1B $CULT race (891B left)
so that being said i wouldn't risk not owning $CULT
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