Burning and Developer Rewards

Polypump’s reward mechanism takes effect at the moment of payout:

1. A fixed percentage (for instance, 5% of the total losing pool) is burned. If bets were placed in $POLYPUMP, those tokens are permanently destroyed, reducing the overall supply. If bets were in SOL, the protocol may convert the fee into $POLYPUMP (via a swap) and then burn those tokens, ensuring that every market contributes to deflation of the $POLYPUMP token. This burn not only supports the token’s value but also serves as an incentive for long-term holders.
2. Another small percentage (e.g. 5%) is allocated as developer rewards. This cut is sent to the project’s treasury or a developer wallet. It funds ongoing development, maintenance, and could also be used to reward community contributors or the market creator. In the future, this might evolve into a community-governed treasury or a reward for the user who created the market (to encourage users to propose interesting markets).

The remainder (~90% of the pot) is distributed to the winners. Losers forfeit their stake entirely, but because the outcomes are binary and the process is transparent, participants understand the risk-reward tradeoff when betting. All transactions (bets, payouts, burns, and fees) occur on-chain, providing transparency and allowing anyone to verify the outcomes and reward distribution.