> For the complete documentation index, see [llms.txt](https://basedrate.gitbook.io/based-rate/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://basedrate.gitbook.io/based-rate/features/poseidon-tax.md).

# Poseidon Tax

### Tax Mechanism

The Poseidon Tax system ensures the protocol's growth by dynamically adjusting based on the $BRATE peg to Ethereum. As the $BRATE peg fluctuates, the tax rate changes, helping to maintain the price closer to the peg. (See the table below)

If $BRATE falls below its peg, an automatic sell tax is triggered on all $BSHARE sell transactions. This tax is used to buy $BRATE on the open market and burn it, bringing buy pressure while reducing the circulating supply! (See the table below)

**100% of the taxes are burned, reducing both the circulating and total supply of $BRATE!**

{% hint style="info" %}
Always consider the current $BRATE peg price before conducting transactions, as it directly impacts the level of slippage you may experience.
{% endhint %}

<figure><img src="https://389455173-files.gitbook.io/~/files/v0/b/gitbook-x-prod.appspot.com/o/spaces%2F8Z3aDYVGD7N51oiQ1iw2%2Fuploads%2FJq6XH79cBTaZNG8cxYTO%2F_Pulse%20Rate%20Logo%20-%202023-10-05T115946.347.png?alt=media&amp;token=ab1d2a68-ed0f-434a-8370-09af4836eaa4" alt=""><figcaption></figcaption></figure>