# Coin Burn

**Coin Burn** is a recurring weekly protocol event that transfers a percentage of a participant's Gencoin balance to the Platform Treasury. The default rate is 20% of holdings per cycle.

> **Note:** Coin Burn is currently disabled. It will be enabled in a future rollout as the protocol matures. This page documents the feature as designed.

## What Coin Burn Actually Does

The term "burn" is a common shorthand in token economies, but in Generos it is more precise to say the Gencoin is transferred rather than destroyed. When a coin burn event occurs, the affected Gencoin moves to the Platform Treasury, where it funds the continued development and operation of the protocol. The value does not disappear. It returns to the infrastructure that makes the system work.

## Why It Exists

Coin Burn is designed to encourage active participation rather than passive accumulation. Holding Gencoin without engaging in the protocol carries a cost. This creates a natural incentive to keep giving, keep directing Gencoin toward causes, and keep participating in the cycle rather than sitting on generated value.

This is consistent with the protocol's founding design: Generos rewards participation, not possession.

## Mitigating Coin Burn

Participants have options to reduce the impact of coin burn on their holdings:

**Seed Redemption**: Redeeming Gencoin through the Seed Redemption process converts a portion to USDC before the burn event can affect it. This is the primary mechanism for preserving generated value.

**Active Participation**: Consistent gifting and engagement within the protocol can reduce the effective burn rate, rewarding those who remain active in the Give → Generate → Grow cycle.

## The Bigger Picture

Coin Burn is one of several mechanisms the protocol uses to maintain a healthy, active economy. By ensuring that Gencoin flows rather than pools, it keeps the regenerative cycle moving and reinforces the core principle: generosity generates abundance, but only for those who participate in it.