Tokenik Sell Tax Support – How does it work?

Tokenik sets a new standard in terms of sell taxes on tokens putting an end to the countless discussions between the PROs and CONs to having one.

Tokenik is the only DEX to completely innovate how sell taxes are being handled at the protocol level, handling them in such a way that sellers aren’t impacted by a sell tax anymore.

Sell taxes are being used by projects for various reasons: be it as a deflationary measure that burns the selling fee, or meant to redistribute a percentage of those fees to token holders or project owners themselves, the sale tax has found various use cases among many projects. However, no matter what the benefit of the sale tax is, users have always looked at it with skepticism and for a good reason: nobody likes losing money.

Before we go into explaining how Tokenik completely innovates the way sell taxes are being handled, one thing should be made clear: a sell tax is in complete control of the project itself. That tax is coded into the token contract itself and nobody has any control whatsoever as to how the “fee” is being handled but the project itself. Despite all of this, Tokenik has managed to come up with a solution.

Tokenik is the only DEX to have completely solved the sell tax issue, by addressing it at the protocol level. In short, regardless if the project has a sell tax, what the percentage is and what its usage is, on Tokenik, sellers won’t be impacted by it; when they sell it will be as if there was no sell tax at all.

Tokenik manages to accomplish this thanks to its proprietary AMM protocol. The swap protocol looks at what the user wants to sell, and uses the value the user is sending to the pair contract to determine the value of the swap, regardless if less tokens are actually being received because of a sell tax. This is possible because Tokenik is able to recalculate the pair price solely based on the amount of tokens that are present on the pair at the time of the swap.

What this means in practice: let’s assume you have 100 tokens you want to sell, and the project has a 10% sell tax. Selling those 100 tokens on Tokenik will grant you the value of the entire 100 tokens; unlike other DEXs where you’d receive the value of only 90 tokens.

Through its proprietary AMM protocol, Tokenik is able to support any token that has a sell tax and makes it in such a way that users aren’t affected at all when they sell the tokens. Users will receive 100% of the value they were supposed to, and the project gets to keep their sell tax as intended. No specific requirements, integrations or changes are needed for a token to be “compatible” with the Tokenik protocol; simply put, we support all tokens.

Tokenik, through its proprietary AMM protocol, gives a whole new sense to the sell tax implementation, removing the downside it has on sellers and turning it into a truly benefiting feature.

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