> For the complete documentation index, see [llms.txt](https://gitbook.agorahub.io/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://gitbook.agorahub.io/burn-mecanism/concept.md).

# Concept

To support long-term value and sustainability, AgoraHub allocates a portion of ecosystem profits to regularly **buy back and burn AGA**, permanently reducing circulating supply and reinforcing scarcity.

⚙️ **How it works**

* A defined share of **net profits** funds AGA buybacks.
* Purchased AGA is sent to a **burn address** (irretrievable).
* Net effect: **lower supply → higher scarcity** while aligning token value with platform performance.

🧮 **Simple example**

* Agora generates **100,000 USDC** net profit.
* **10%** allocated to burn → **10,000 USDC**.
* 10,000 USDC buys AGA on the market → tokens **burned permanently**.

💎 **Benefits for users**

* **Progressive scarcity** of AGA over time.
* **Potential value uplift** for held AGA as supply decreases.
* **Aligned incentives:** as Agora grows, buybacks/burns support long-term holders and complement Relic-based profit sharing.

🏛️ **Benefits for AgoraHub**

* **Credible commitment** to token health and longevity.
* **Efficient profit utility:** converts revenue into lasting ecosystem value.
* **Market resilience:** supports stability and attractiveness for users, partners, and investors.