From Smart Contracts to the $TREE Destruction Mechanism: How is the Deflation Model Designed?

#Treehouse （$TREE ）has built an innovative deflation model through smart contracts, with its core mechanism combining on-chain transparency and economic incentives, aiming to enhance the long-term value of the token. Here are the key points of its design:

1. Smart Contract Driven Automatic Destruction

The destruction mechanism of TREE is automatically executed through smart contracts, with 20% of the protocol revenue used for periodic buybacks and destruction of tokens. This process is fully verifiable on-chain, avoiding the risk of human intervention. For example, when users stake TREE to generate environmental credits (such as tETH), part of the transaction fees will also be directed to the destruction contract, forming a closed loop of 'usage equals deflation'.

2. Dual-Track Token System and Revenue Redistribution

The project has designed a dual-track system of tETH (liquid staking token) and TREE. The staking revenue portion of tETH is converted into TREE destruction fuel through smart contracts, while the DOR (Decentralized Interest Rate) mechanism dynamically adjusts the destruction ratio to ensure that the deflation rate matches ecological demand.

3. Cross-Chain Collaboration Enhances Deflation Effect @Treehouse Official

TREE collaborates with real-world emission reduction projects (such as green electricity certification) to transform carbon offset actions into on-chain destruction events. For example, for every ton of carbon reduction completed by partners, the smart contract will trigger an equivalent destruction of TREE, forming a positive cycle of 'environmental protection-deflation'.

Through the above design, the deflation model of $TREE not only enhances the token's scarcity but also deeply binds environmental actions with economic incentives, providing a new paradigm for sustainable development in the DeFi space.