Price & Supply Dynamics
How SLI behaves as a token
Market-driven price formation
The price of SLI is determined by open market supply and demand.
SLI does not follow a net asset value (NAV), does not maintain a peg, and does not aim to replicate the price of its underlying assets. Its market price may rise or fall independently of the performance of the liquid staked SOL tokens used by the protocol.
As with any freely traded token, price movements reflect market activity, liquidity conditions, and participant behavior.
Indirect relationship with underlying assets
The underlying basket of liquid staked SOL tokens does not directly determine the price of SLI.
Instead, these assets influence SLI indirectly through the protocol’s automated mechanisms. When predefined sell conditions are met, asset positions are converted into SLI buybacks and burns.
This creates a non-linear and delayed relationship between the underlying assets and the SLI token, rather than a direct price linkage.
Supply reduction through burns
SLI includes a built-in mechanism that can reduce the circulating supply of the token.
When sell triggers are executed:
underlying assets are sold,
proceeds are used to buy SLI on the open market,
the acquired SLI tokens are permanently burned.
Burn events reduce the total supply of SLI and may affect supply-demand dynamics over time.
Role of trading activity
Trading activity plays a central role in the system’s behavior.
Each buy or sell of SLI:
contributes fees to asset accumulation,
creates new sell conditions,
and increases the number of potential future burn events.
As a result, periods of higher activity may lead to a greater number of active sell triggers, while periods of low activity may slow the system’s internal processes.
Volatility considerations
SLI is a volatile asset.
Its price may experience significant fluctuations over short or long periods, regardless of the behavior of the underlying basket. There are no mechanisms designed to stabilize, smooth, or constrain price movements.
Participants should expect variability in price behavior and should not assume predictable outcomes.
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