Many people think that FLOKI is simply a token with automatic burn, but that's not the case. Its deflationary logic is much more complex, mainly relying on four pillars: "transaction tax redistribution, market buyback and burn, ecosystem consumption, and proactive burn by governance."

The most direct and easiest to understand is the buyback and burn part. The operation is straightforward: the protocol or community treasury uses transaction taxes or ecosystem income to directly purchase FLOKI on the secondary market, then transfers the bought tokens to a black hole address for permanent lock-up. This way, the circulating supply is genuinely reduced.

There are several notable features of this mechanism. First, the scale and frequency of buybacks will fluctuate with market activity—more active trading means more transaction tax revenue, providing more funds for buybacks. Second, the frequency and scale of buybacks are not fixed; the community can adjust the strategy through governance voting. Finally, this approach benefits long-term holders because the total circulating supply is continuously shrinking, making your share of the tokens in circulation decrease at a slower rate.