There are several methods to earn with blockchain technology, primarily through cryptocurrency transactions. For example, the blockchain receives a gas price for each transaction as a public ledger, which is how miners and stakers make money. However, did you know there is a second way to earn cryptocurrency? This blog will give you an understanding of what reflection tokens are, how they function, and how you can earn crypto by investing in them.
What is a Reflection Token
A Reflection Token is a project set up where every buy, sell or transfer that happens with the token is taxed a certain percent. That tax is then redistributed as a “reflection” to the investors. To equate it with the current financial system, you can consider reflections as a dividend type; reflection tokens are dividends paid to digital currency holders. The investors can invest the tokens back into the network or transfer them to an exchange. The amount received depends on several factors, including how long you hold the coin and the distribution rate.
How Reflection Tokens Work
A reflection token is a system for giving rewards. The longer you hold a token and the larger your ownership or bag, the bigger the reward you get. For each transaction, like a purchase, sale, or transfer, you will usually get a percentage of the predetermined tax.
The Math is Simple
The greater the volume of transactions within the pool, the longer you hold the token equals an increase in the token’s value. The value will continue to rise as you receive more and more tokens with each transaction.
Tax is Distributed
Typically, the tax is set up as a lump sum distributed in various ways with a set percentage that is redistributed to holders with each transaction. For example, let’s say the tax on reflection token X is 10%; this 10% can be distributed in various ways. For instance, it might be 4% for rewards, 4% for buy-back and burn (cutting supply), 1% for marketing, and 1% for charity. In this example, the holder would receive 4% of their bag amount back in the form of reflections with each transaction.
Reflection tokens promote the continued success of a digital currency’s developers by paying investors for their participation on the platform. As a result, the user base is increased and maintained, and the network is fortified. In conclusion, reflection tokens benefit everyone, not just those who possess them.
We are excited to see how this idea evolves in the ever-changing world of digital currencies, as it is both simple and effective. Watch this video to learn more about reflections: https://youtu.be/cQlKLbQjmm4. At Rematic Tokens, we are producing an educational series of videos to guide investors through the world of cryptocurrency. Check out the Rematic Education series here. To learn more about Rematic Tokens and our mission, visit our website!