Mechanics & Rules

What happens on every trade

Fixed index parameters

SLI operates according to a predefined and immutable set of rules.

At deployment, the following parameters are fixed:

• the composition of the underlying basket,

• the equal weighting of each asset,

• the transaction fee structure,

• and the sell multiplier applied to each underlying token.

Once deployed, these parameters cannot be modified. There is no governance process, upgrade mechanism, or discretionary override affecting the index design.

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Transaction fee structure

Every buy or sell of SLI applies a 3% transaction fee.

This fee is enforced automatically by the protocol and is applied uniformly across all market interactions.

The fee is distributed as follows:

• 80% is allocated to the purchase of the underlying liquid staked SOL tokens,

• 10% is allocated to the team,

• 10% is allocated to the Bands platform.

All fee allocations are executed onchain and follow deterministic rules.

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Equal-weight asset acquisition

The portion of fees allocated to asset acquisition is used to purchase the five underlying LSTs.

Each purchase is executed using an equal-weight approach, ensuring that all assets maintain the same functional role within the system.

There is no rebalancing logic, optimization process, or asset rotation. All acquisitions follow the same proportional logic regardless of market conditions.

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Sell multiplier logic

For each underlying asset purchase, the protocol records a reference price.

A sell multiplier of 1.2× is applied to each asset relative to its reference price. When the market price of an asset reaches this predefined threshold, a partial automated sell is triggered.

This logic applies independently to each underlying token and does not rely on forecasts, timing decisions, or external input beyond price observation.

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Buyback and burn execution

When an asset is sold following a sell trigger, the proceeds are used to buy back SLI tokens from the open market.

The SLI tokens acquired through this process are immediately and permanently burned.

This mechanism reduces the circulating supply of SLI and is executed automatically without manual intervention.

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Deterministic and cumulative behavior

Each SLI transaction contributes new asset purchases and new sell conditions.

As a result, the system accumulates multiple active sell triggers over time. These triggers operate independently and may be executed at different moments based on market conditions.

All actions follow predefined rules and are enforced entirely onchain.