Rayls Tokenomics: Automated Buybacks, Burn, and the Rayls Reserve

At Rayls, we are building an ecosystem to combine the stability of traditional finance and crypto innovation. As we move closer to our Mainnet launch (Q1 2026), it is vital that we share the economic principles that underpin our ecosystem.

We have designed a tokenomics model that is not only sustainable, but actively aligns the incentives of institutional clients, validators, and our token holders.

Our approach focuses on long-term value accrual. By integrating real-world fiat revenue streams directly into an on-chain deflationary mechanism, we ensure that as adoption of the Rayls Privacy Node grows, the entire community benefits.

The Tokenomics Model Overview

The core logic of the Rayls tokenomics model is a system designed to capture value from (predominantly) institutional usage fees, redistribute this value across our DeFi community, and reduce supply to instil deflationary pressure into the token economy.

Workflow

• Fees are generated across both the Rayls Public Chain and each Rayls Privacy Node (one per institution).
• Fees are aggregated into an account on the Rayls Public Chain in USDr (Rayls’ native gas stablecoin) and RLS, providing full public visibility.
• USDr fees are automatically converted into RLS via a DEX based upon specific triggers.
• A percentage of all RLS from aggregated fees is automatically burned, and the remainder is deposited into the Rayls Reserve account.
• RLS in the Rayls Reserve is automatically distributed across the ecosystem into the validator pool, ecosystem development fund, and Foundation operations account.

This cycle ensures that the Rayls Fees Aggregator is constantly replenished and used to purchase RLS, while a portion of that RLS is burned, creating consistent demand for the RLS token while simultaneously decreasing supply.

The automated triggers and guardrails have been designed to weather market volatility while rewarding long-term participation.

1. Bridging Fiat to On-Chain Value

A major friction point for institutional adoption is the requirement to hold and transact in cryptocurrency.

To solve this, Rayls allows Privacy Node clients to pay transaction fees in fiat currency, USDr, or RLS. This ensures a seamless user experience for enterprise clients while preserving the on-chain economic model.

Behind the scenes, a verified Foundation OTC partner converts (off-chain) fiat fee payments into Rayls-approved tokens, specifically USDr or RLS. These funds are then deposited directly into the Rayls Fees Aggregator account on the Rayls Public Chain.

This mechanism ensures that the value of institutional usage and activity in Rayls private chains is captured and exerts positive pressure on the Rayls ecosystem.

Verified OTC partners are brokers that operate in local markets (i.e., specific countries) to accept Rayls fees in local fiat currency and convert this value into USDr or RLS on the Rayls Public Chain.

For transparency, verified OTC partners will be carefully selected and monitored by the Rayls Foundation, and a registry of OTC partner public chain addresses will be published on the Rayls Public Chain so anyone can track the inflows of institutional fees captured from Privacy Nodes.

2 & 3. The Buyback Engine

Once fees are aggregated, the protocol engages a robust buyback mechanism.

The Rayls Fees Aggregator holds both USDr and RLS, serving as the engine for the deflationary policy.

The buyback process is governed by a two-layer policy:

• A deterministic framework establishes “earmark eligibility” based on specific triggers such as account balance thresholds and other factors.
• The execution of swaps from USDr to RLS is randomized and spread across several smaller transactions.

This randomization protects the network from MEV (Maximal Extractable Value) bots and front-running. By executing smaller, daily swaps with strict slippage constraints, the system deepens the order book and dampens volatility rather than creating predictable spikes.

4. Adaptive Burn Mechanics

A key pillar of the Rayls value proposition is the reduction of total token supply over time.

A variable percentage of all RLS fee payments is automatically burned and permanently removed from circulation.

Rather than a static burn rate, Rayls uses a decreasing burn model that depends on:

• The remaining percentage of the original RLS supply
• The price of RLS

For example, in early stages where supply is near the fixed total supply of 10 billion RLS and the token price is low, the burn rate may be as high as ~50%.

As supply decreases and price increases, the burn percentage adjusts downward, ensuring a smooth economic curve that avoids negative price volatility.

5. The Rayls Reserve and Distribution

Tokens that are not burned are sent to the Rayls Reserve account.

The Reserve operates under automated policies and governance guardrails to ensure long-term economic stability.

The Reserve distributes funds across three key areas:

• Validator pool
• Ecosystem development
• Foundation operations

These allocations are not static. A maturity-based model adjusts distribution ratios as the network evolves:

• Early stages prioritize validator rewards to ensure security
• Growth stages increase ecosystem development funding
• Mature stages balance allocations across all three areas

Validator Strategy

Rayls initially implements a permissioned validator set that is geopolitically distributed to mitigate political risks of collusion.

Policies ensure:

• Geographic balance
• Diversity of validator entity types

As the validator set grows and the ecosystem matures, governance will transition into a DAO model, with token holders voting on protocol and policy changes.

Summary and Next Steps

The Rayls tokenomics model is designed to be robust, transparent, and deflationary.

By converting fiat revenue into on-chain buybacks and balancing token burning with strategic ecosystem funding, Rayls is building a protocol positioned for long-term longevity.

Deterministic triggers for the buyback mechanism and maturity criteria for Reserve allocations are currently being finalized. An initial version will be implemented at Mainnet launch, followed by optimizations guided by token holder voting.

More detailed technical documentation and parameters will be shared in the near future. Feedback and suggestions from the community are welcome.