How SnuggleCleo Leverages Liquidity Pool Fees to Empower the Community and Boost Token Value

 

At SnuggleCleo, transparency and community empowerment are at the heart of everything we do. A critical part of our tokenomics strategy involves how we manage the liquidity pool and use the revenue it generates.

This article explains the steps we’ve taken to establish the liquidity pool for SNUG tokens and how the generated fees are used to create value for the project, its community, and its charitable mission.

The Initial Liquidity Pool

To kickstart SNUG’s trading and ensure smooth transactions, the project allocated 100,000,000 SNUG tokens (10% of the total supply) to create an initial liquidity pool on Raydium, paired with 2 SOL. Liquidity pools are essential in decentralized exchanges, allowing users to trade tokens efficiently.

To secure this liquidity and ensure trust within the community, we locked all the Liquidity Provider (LP) tokens using Raydium’s locking service. While these LP tokens are locked, they have not been burned, meaning they will still participate in earning transaction fees generated by the pool.

How Transaction Fees Work

Every time someone swaps tokens within the SNUG liquidity pool on Raydium, a 0.25% transaction fee is charged. Here’s how these fees are distributed:

  • 0.03% goes to Raydium, supporting the protocol’s operations.
  • 0.22% is shared among all liquidity providers (including the locked LP tokens) in proportion to their share of the pool.

As a liquidity provider, the locked LP tokens owned by the project earn a share of these fees alongside other pool participants. This revenue is then used to benefit the community and advance SnuggleCleo’s mission.

How the Revenue Is Used

The transaction fees collected through the liquidity pool are utilized in three impactful ways:

1. Community-Driven Donations (50%)

Half of the fees generated will be donated to one of our partner institutions that cares for animals in need. The specific institution receiving the donation will be decided through a community vote, empowering our supporters to choose which organizations to help. A different institution will be chosen every month.

2. Buyback and Burn Program (25%)

To support the long-term value of SNUG tokens, 25% of the revenue will be used in a Buyback and Burn Program:

  • The project will buy SNUG tokens from the market using the revenue.
  • These tokens will then be permanently burned, reducing the total supply and creating scarcity, which helps in token price stabilization and potential appreciation.
    The community will be able to track this process on a dedicated section of the project’s website for full transparency.
3. Liquidity Expansion (25%)

The remaining 25% of the revenue will be sent to a special liquidity wallet. These funds will be reinvested into the liquidity pool, increasing its size over time. A larger liquidity pool benefits the ecosystem by:

  • Making trades smoother and less volatile.
  • Generating higher transaction fees, which feed back into donations and the buyback program.

This reinvestment creates a positive feedback loop that strengthens the project and enhances the community’s benefits.

Tracking and Transparency

To ensure full transparency, the project will provide a tracking system on the official website. This system will allow the community to monitor:

  • The amounts donated to partner institutions.
  • Tokens bought back and burned.
  • Funds reinvested into the liquidity pool.

By making this information readily available, we aim to build trust and showcase the real-world impact of every token swap.

Conclusion

The liquidity pool is more than just a trading mechanism for SNUG tokens; it’s a dynamic system that powers donations, strengthens token value, and enhances liquidity. Every transaction contributes to the community’s growth, supports charitable causes, and fuels the long-term success of SnuggleCleo.

Thank you to everyone who supports SnuggleCleo—your participation not only helps us grow stronger but also helps animals in need around the world. Together, we’re making a difference, one SNUG token at a time!

Together, we’re not just building a token; we’re creating a movement that empowers community, strengthens value, and makes a lasting impact for animals in need.