6.3.2 Token Deflation Mechanisms

(1) Dynamic Burn Mechanism

Cottonia adopts a “task-driven burn model”:

• A portion of $COT paid for each computing task is automatically burned;

• The burn rate dynamically adjusts based on system usage and resource supply-demand to maintain token deflation and price stability.

(2) Node Exit Burn

When nodes exit the system, part of their staked $COT is burned to balance token supply and prevent short-term arbitrage.

(3) Platform Buyback & Burn

Cottonia will periodically buy back $COT from the market using revenue and burn it to control circulation and increase scarcity.

(4) Ecosystem Event Burn

During major upgrades, DApp launches, or the initiation of new ecosystem partnerships, the platform will burn a designated amount of $COT as a commemorative “ecosystem deflation event.”