# Economic Purpose
## Burn-to-Earn Pool
### 1. Economic Purpose
The Burn Pool converts permanent supply reduction into ongoing emissions income.
Economically, it:
* Removes NOVA or Horizon from circulation forever
* Converts destroyed tokens into time-weighted claim on future emissions
* Creates a reflexive link between scarcity and reward
This is not staking. It is capital sacrifice in exchange for yield.
***
### 2. Rational User Behaviour
A rational user enters the Burn Pool when:
Expected future NOVA rewards > opportunity cost of burned capital
Typical Burn Pool users:
* Long-term believers in Horizon
* Users with already-accrued NOVA
* Users who value supply reduction as much as yield
* Users seeking exposure to emissions without LP or price risk
Burning is attractive when:
* NOVA is undervalued
* Pool APR is high
* User expects protocol usage to grow (more buy & burn)
***
### 3. APR Dynamics
APR is:
\
Therefore:
* Early participants earn high APR
* As more users burn, APR compresses
* APR stabilises around a market-clearing rate
This creates natural equilibrium:
* High APR → more burns → APR falls
* Low APR → fewer burns → APR rises
***
## Forfeit-to-Earn Pool
### 1. Economic Purpose
The Forfeit Pool converts unused or future claims into immediate reward weight.
It:
* Reclaims dormant or delayed value
* Routes forfeited assets to the Treasury
* Smooths emission distribution by absorbing optionality
This is about giving up upside optionality for predictable yield.
***
### 2. Rational User Behaviour
A rational user forfeits when:
Expected future value of forfeited asset < expected NOVA emissions earned
Typical Forfeit Pool users:
* Users with idle miners
* Users unwilling to wait for long vesting schedules
* Users who prefer predictable emissions over speculative future rewards
Forfeiture is attractive when:
* Miners are underperforming
* Time preference is high
* Forfeit APR exceeds expected miner yield
***
### 3. APR Dynamics
APR follows the same structure:
\
Key differences:
* Forfeited value is not destroyed
* Treasury accumulates assets
* APR stabilises faster than Burn Pool
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