Profit Split
Profit-Based Funding
A core principle of CDX tokenomics is that buybacks and staker yield are funded from platform profit, not gross revenue. This distinction is critical for sustainability.
How It Works
Platform Revenue
↓
Operating Costs
(Infrastructure, Team, Development)
↓
PROFIT
↓
┌──────┴──────┐
↓ ↓
Buyback Staker
& Burn Yield
(CDX) (USDC)Why Profit Matters
Sustainability
Platform remains viable long-term
No Debt Financing
Distributions backed by real earnings
Aligned Incentives
Token holders benefit when platform succeeds
Transparency
Clear relationship between performance and rewards
Profit Calculation
Profit Calculation
Off-chain (standard accounting)
Distribution
On-chain (transparent, verifiable)
Profit is calculated using standard business accounting practices, then distributed on-chain for full transparency and verifiability.
The Profit Split
The allocation between buybacks and staker yield dynamically adjusts based on CDX market price:
Below $1
70%
30%
$1 and above
30%
70%
Why This Design?
When CDX is Below $1
Heavy buybacks (70%)
Reduces circulating supply
Price support
Consistent market purchases
Accelerated path
Drives toward $1 threshold
When CDX is At or Above $1
Higher yield (70%)
Rewards long-term stakers
Milestone reward
Recognizes collective achievement
Stake incentive
Encourages maintaining positions
The Yield Flip
The transition at $1 is called the Yield Flip:
This creates a self-balancing system that optimizes for current market conditions.
100% Burn Policy
All CDX purchased through buybacks is permanently burned:
No Treasury Accumulation
Tokens don't sit in a DAO wallet
No Future Selling Pressure
Team can't dump bought tokens later
True Deflation
Supply decreases permanently
Verifiable
All burns recorded on-chain
Burn Mechanism
1
Platform generates profit
2
Designated portion allocated to buybacks
3
CDX purchased from market
4
Tokens sent to burn address (irrecoverable)
5
Total supply decreases permanently
Buyback Execution
How Buybacks Happen
Executor
3/7 multisig (Conclave contractors + Cod3x Foundation)
Timing
Ad-hoc (prevents front-running)
Method
DEX aggregator on Base network
Alternative
OTC deals with >5% discount
Transparency
All buybacks visible on dashboard after execution
Multisig Structure
Threshold
3 of 7 signers required
Composition
Conclave contractors + Cod3x Foundation members
Timelock
None (slippage management requires flexibility)
Why No Timelock?
Slippage Management
Can't respond to market conditions
Front-Running
Creates predictable execution windows
Capital Efficiency
Reduces effectiveness of buybacks
Execution Methods
Aggregator Purchases
Platform
DEX aggregator on Base
Timing
Ad-hoc to prevent gaming
Benefit
Best available price across DEXs
OTC Deals
Threshold
Minimum 5% discount to market price
Use Case
Larger purchases where DEX slippage is high
Benefit
Guaranteed favorable pricing
Why Ad-Hoc Execution?
Scheduled buybacks can be gamed:
Front-Running
Traders buy before known buyback times
Sandwich
Sell immediately after
Value Extraction
Drains value from the system
Ad-hoc execution prevents this by making timing unpredictable.
Transparency Dashboard
All buyback and yield distribution data is publicly visible:
Buyback History
Date, amount, price, transaction hash
Burn Verification
On-chain proof of token destruction
Yield Distributions
Per-period USDC allocated
Profit Metrics
Platform performance indicators
Cumulative Burns
Total CDX removed from supply
Key Takeaways
Profit, Not Revenue
Only actual earnings fund tokenomics
Dynamic Split
Allocation optimizes for market conditions
100% Burns
No treasury hoarding or future sell pressure
Ad-Hoc Timing
Prevents front-running, maximizes efficiency
Full Transparency
All actions verifiable on-chain
3/7 Multisig
Secure but flexible execution
FAQs
Q: What counts as "profit"?
Revenue from credits, subscriptions, and fees minus all operating costs including infrastructure, team, and development.
Q: How often do buybacks occur?
Profit is determined every 14 days. Buyback timing varies intentionally within each cycle. The dashboard shows all historical buybacks.
Q: What if an OTC deal is available?
OTC deals are only executed if they offer at least 5% discount to market price, ensuring buybacks always get favorable pricing.
Q: Where can I verify burns?
All burns are recorded on-chain at the burn address. Links available on the transparency dashboard.
Q: How is the $1 threshold determined?
Manual processing at each 14-day deposit cycle. Will transition to automatic oracle-based processing if the system is well received.
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