We aim to reward all COV token holders by distributing part of the platform's accrued commissions to the asset contract.
There are two main mechanisms of returning value to contributors: dividends and buybacks.
Dividends create a variety of problems in the digital asset space, one of the primary concerns being - paying dividends to tokens which are held on an exchange. Dividends would be sent to the exchange’s custodial address - not to the individuals who should own them - as they are the custodian (holder) of any assets on their exchange. In order to allow for a dividend disbursement to an exchange holding address, all of the exchanges would have to agree on how to handle the dividends, and the exchange could potentially just keep all distributed dividends. Having a dividend payout almost guarantees that such tokens will be considered a security token while our token - COV - is a utility token. There is also a transaction cost associated with sending dividends to COV holding addresses.
Taking all of this into account we've decided to choose a more efficient and more regulatory favourable value disbursement method – Buyback and Burn. Technically speaking, we will systematically buy COV tokens on exchanges and “Burn” them. “Burning” means that purchased tokens will be removed from circulation and locked into an irreversible smart contract address for perpetuity, consequently decreasing the total supply of COV tokens. This should effectively improve the value of COV over a long-term period.
We aim to allocate at least 50% of all platform earnings in fees to systematic Buyback and Burn programs. Such repayment programs set best practices for the new economy, and simultaneously serve in the best interests of Covesting token holders. As time goes by, we will closely monitor the regulatory environment and possibly introduce alternative methods of value distribution according to market rules.