Merge Mechanics
🛠️ How It Works
Merge Markets enables token projects to unify under a shared ecosystem through a permissionless, incentive-driven process. Here's how the system works, step by step:
1. Initiating a Merge Proposal
Any token community can propose a merge. This involves creating an incentive market where they commit tokens to attract holders of a competing or aligned token to join their ecosystem.
For example:
Token X holders propose pooling 1,000,000 X tokens as a reward for Token Y holders to merge their token into Token X.
2. Governance Participation
Both communities—Token X and Token Y—can independently discuss and vote for the merge.
Token Y holders may accept the offer or initiate their own incentive market to merge in the opposite direction.
Communities can customize merge types (Swap & Burn, Burn Only).
3. Executing the Merge
Once approved by governance, the merge is executed via smart contracts:
Token Y liquidity is moved into Token X’s pool.
Token Y tokens are either burned directly or swapped for Token X before being burned.
Token X incentive tokens are issued to participating Token Y holders.
4. Post-Merge Integration
After the merge:
Token Y’s branding, narrative, or community may be folded into Token X’s story.
Communities can coordinate governance, media, and branding.
Ghost pools can be removed from DEXs, and liquidity is concentrated under a single active token.
5. Scam Score Filter
Before a merge goes live, the system flags tokens with high-risk indicators to prevent malicious actors from draining liquidity or injecting toxic holders into the mother ecosystem.
🔥 Mechanics
Merging is not one-size-fits-all. The protocol supports two primary merge mechanics, allowing communities to choose the path that best aligns with their values, goals, and token economics.
🔁 Swap & Burn
How it works:
Child tokens (the merging token) are swapped for mother tokens at a predetermined target.
The received mother tokens are immediately burned, reducing total supply and signaling long-term commitment.
Use case:
Ideal for communities looking to gain exposure to the mother token while demonstrating value and reducing inflation.
Adds deflationary pressure to the mother token, benefiting holders.
Example: Token Y holders receive Token X in exchange for their Token Y—then the Token X received is burned. Liquidity is migrated to Token X’s pool.
🔥 Burn Only
How it works:
Child tokens are sent to a burn address, and Child contributors get tokens from Mother Contributions.
Use case:
Symbolic gesture of trust or deprecation.
Useful for clearing out dead, scammy, or abandoned tokens.
Helps purify the ecosystem without adding inflationary pressure.
Example: Token Y community decides to burn their remaining supply and officially join Token X’s ecosystem.
💡 Why It Matters
These options allow for flexible, strategic merges:
Projects with real value can incentivize holders to join them.
Dying or ghost tokens can be gracefully deprecated.
New tokens can be launched with a clear path to consolidate if fragmentation arises.
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