WHAT IS REFLECTION INSIDE CRYPTO ?
The concept of the reflection mechanism was newly introduced into the cryptocurrency space a few months back. A reflection mechanism can be defined as a process in which tokens act as a self-generating mechanism for their holders. As every transaction is taxed you receive tokens automatically simply by holding the token. The reflection mechanism was developed with the hopes of transforming the concept of yield generation in the DeFi ecosystem.
How it works These DeFi tokens use a static reward system, which means that every transaction made with tokens that use this mechanism is ‘taxed’. This means that a percentage is added to a liquidity pool for every transaction, and another portion is set aside for redistribution among token holders. As a result, the value of these tokens is self-generating and aims to promote a ‘hold and earn’ culture, which reduces selling pressure. The reflection mechanism is accomplished through smart contracts, which automate the token redistribution, and all those holders need to do is manage the wallet in which their tokens are stored.
“The more we value things, the less we value ourselves.” –