> For the complete documentation index, see [llms.txt](https://docs.loopad.fun/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://docs.loopad.fun/product/buyback-and-burn.md).

# Buyback & Burn

The loop is Loopad's signature mechanic: part of every trade's fee **buys the token back in its own pool and burns it**, shrinking supply forever.

## How the fee splits

Every swap on a Loopad pool pays a **1% total fee**. At launch, the creator decides how that 1% is divided:

```
1% fee per trade
├── buyback share (0–90%, creator's choice, LOCKED at launch)
│     └── accrues in the hook → executeBuyback() → buys the token → BURNED 🔥
└── LP fee (the rest)
      └── 60% creator / 40% protocol
```

Example — buyback set to 50%: each trade pays 0.5% into the buyback pot and 0.5% as LP fees.

## Why it can't be changed

The LP fee is baked **statically into the pool's identity** (the Uniswap v4 `PoolKey.fee`), and the hook stores the buyback share with **no setter function**. This isn't a promise — it's architecture. No admin, including Loopad, can turn the loop off, raise it, or lower it after launch.

## The two burn paths

The hook skims the buyback share from every swap:

* **On buys**, the skim lands in the launched token → **burned immediately**, in the same transaction as the trade.
* **On sells**, the skim lands in the quote asset (ETH/USDG/stock) → accrues in the hook as a **pending buyback pot**.

## Executing the buyback

Anyone — creator, holder, bot — can call `executeBuyback` at any time (there's a button on every token page whenever the pot is non-empty). It:

1. Spends the entire accrued pot buying the token in its own pool — real, visible buy pressure;
2. **Burns** every token it receives — `totalSupply` drops on-chain.

All burns are permanent and visible: the token page and the board show cumulative burned amounts and the total value looped back.

## No buyback?

Creators can launch with the loop off (buyback 0%). The full 1% then flows to LP fees. The board labels these tokens plainly so traders always know which mode a token is in.


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