How DIAMOND works

DIAMOND ($DMND) is a fixed-supply token on Base paired with a Uniswap v4 hook that taxes selling and pays holding. The token itself is a clean, immutable ERC-20 — no fee-on-transfer, no blacklist, no mint function, free P2P transfers. All the economics live in the hook, at the swap level, which is only possible on Uniswap v4.

The thesis in one line: sell pressure becomes the holders' income. Every panic sell pays a fee that funds a jackpot for everyone who didn't sell, buys back and burns supply, and rewards liquidity providers.

• Buying costs 0%. The hook charges no fee on buys. Entry is frictionless by design — buyers are future holders.
• Selling costs 0.5% → 10%, scaling with panic. The hook measures real sell volume (in ETH terms) inside a 1-hour pressure window that resets when it expires. Light selling pays the 0.5% floor; as sell pressure approaches 50 ETH in the window, the fee climbs linearly up to the 10% cap. When the dump is at its worst, dumpers pay the most.

These parameters are compile-time constants. No admin, owner, or keeper can change the fees, the window, or the cap — ever.

marginalRate(v) = 0.5% + 9.5% × min(v / 50 ETH, 1)
fee(sell) = average of marginalRate over the sell's own volume

Each sell pays the average of the curve over its own volume — so a single 50 ETH dump, ten 5 ETH dumps, or a contract splitting it into a hundred micro-swaps all pay exactly the same total fee. The mechanism is structuring-proof by construction.

Most "tax tokens" track fees as a number in a spreadsheet-like counter. DIAMOND captures them as real funds: the hook takes the fee as ERC-6909 claims it owns inside the PoolManager (OpenZeppelin's BaseHookFee pattern), then redeems them into the treasury. Every pot below is backed by actual WETH with an on-chain exit:

Edge case: on exact-output sells the fee is collected in DMND instead of WETH — that DMND never touches the pots; it is burned immediately on redemption.

The jackpot pays every holder, proportionally to balance, in WETH — without staking, locking, or registering anything. Hold $DMND in your wallet and you are in.

1. 1.Sell fees accumulate in the jackpot pot (50% of every capture).
2. 2.Each epoch, the pot is forwarded to the MerkleDistributor contract — a permissionless call anyone can trigger; the destination is hard-coded.
3. 3.A snapshot of every holder's balance is taken at a single instant, reconstructed from public on-chain Transfer events. Excluded from the share-out: the burn address, the pool manager, the distributor itself, the treasury and the deployer — only real circulating holders count.
4. 4.Your share = pot × your balance / circulating supply. The full payout table is committed on-chain as a Merkle root, and the epoch opens.
5. 5.You claim on this site with one click (gas only — the proof is built in your browser). You have 30 days; unclaimed WETH rolls into the next epoch's pot, it never leaves the protocol.

Selling resets your future share the honest way: the next snapshot simply sees your smaller balance. There is no score to game, no timer to reset, no way to count the same tokens twice — the snapshot is a single frozen instant.

Three independent yield engines run on every unit of sell pressure:

• Direct cash flow. 50% of all sell fees are distributed in WETH, pro-rata by balance. You are paid for doing nothing — the optimal strategy is enforced by the curve, not by faith.
• Permanent circulating-supply reduction. 30% buys $DMND on the open market and burns it. Every dump shrinks the circulating supply your tokens are measured against. Burned tokens are also excluded from snapshots, so your share of every future jackpot grows as supply burns.
• Deeper, stickier liquidity. 20% rewards in-range LPs, which tightens the market and dampens volatility — protecting the price holders hold.

Worked example: say a turbulent stretch captures 2 ETH in sell fees over an epoch. That splits into 1 ETH for the jackpot, 0.6 ETH for buyback & burn and 0.4 ETH for LPs. If you hold 1% of circulating supply, your claim that epoch is 0.01 ETH — earned passively, paid in WETH, claimable with one click. The worse the panic, the higher the fee tier, the bigger the pots.

And the reflexive kicker: high sell pressure pushes the fee toward 10%, which makes dumping progressively more expensive exactly when it hurts most — throttling crashes while refilling the holder pots at the maximum rate.

What you don't have to trust:

• [✓]The token: immutable ERC-20, fixed 1B supply, no owner, no mint, no pause.
• [✓]The fees: all constants. Nobody can raise them, lower them, or redirect them.
• [✓]The pots: destinations are one-shot and hard-coded after deploy. The jackpot can only go to the distributor; treasury funds only move where the hook says.
• [✓]The cap: an epoch can never promise more WETH than the distributor actually holds — enforced on-chain. Claims need a valid Merkle proof; double-claims are blocked by bitmap.
• [✓]The buyback: its destination is fixed — bought $DMND burns at 0xdEaD on the public pool, with slippage protection, verifiable by anyone.

What you do trust, stated honestly: the epoch snapshot is computed off-chain by a keeper, and the keeper also chooses when to trigger buybacks and LP donations. The keeper cannot steal beyond the funded pot (hard cap), cannot claim twice, and cannot touch your tokens — but it could publish a dishonest payout table. The defense: every snapshot is reproducible by anyone from public on-chain events, so a dishonest root is immediately detectable, and the distributor's ownership is 2-step transferable to a multisig. This trade-off is what keeps holding 100% passive — no staking contract, no token locking, no custody.

The protocol was adversarially reviewed during development: two earlier jackpot designs were discarded after internal audits proved them exploitable, and the current snapshot-based model is the one that survived. The full test suite (26 tests, including a cross-check that the off-chain snapshot tree matches the on-chain verifier byte-for-byte) passes green.