> For the complete documentation index, see [llms.txt](https://docs.primora.meme/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://docs.primora.meme/introduction/primora-token/dynamic-tax-mechanism.md).
# Dynamic Tax Mechanism
Whale sell-offs often trigger a domino effect prices drop, buyers pull back, and the market spirals downward. With $PRIM, we’ve introduced a **Dynamic Tax Mechanism** to change that narrative. This innovative approach encourages buyers to step in during dips and helps stabilize the token’s price.
{% hint style="success" %}
In simple terms: Buy during dips, earn free $PRIM
{% endhint %}
***
## Trigger Conditions
The dynamic tax system activates when the token’s price drops **5% or more** from its **highest recorded price**, which is set as the base. Once this threshold is breached, a **sell tax** is triggered to stabilize the dip and reward buyers stepping in.
***
## Tax Rate Scaling
The sell tax rate adjusts dynamically based on the percentage of the price drop and scales up to a **maximum of 15%**. This mechanism ensures that the tax only activates when needed and decreases as the market stabilizes.
The tax rate continues to decrease in real-time as the price recovers but remains active until one of the following conditions is met:
1. **The token’s price fully returns to the base level.**
2. **30 minutes have passed since the tax was triggered.**
Even during the recovery phase, buyers continue to receive 100% of the collected taxes until the active tax period ends, ensuring they are rewarded for supporting the token’s price stability.
## Distribution of Collected Taxes
During an active tax stage, **100% of the collected taxes are distributed to buyers** who purchase during the period. Primora.meme retains **none** of the taxes, all of it goes back to the community.
Users can track the collected tax pool in real-time on our [website](https://www.primora.meme/primora). Once the tax stage ends, the entire pool is distributed to buyers who participated, ensuring transparency and trust.
{% hint style="danger" %}
**Rewards earned during a tax stage unlock after 24 hours. Selling or transferring tokens before that forfeits your rewards, which are rerouted to the staking pool to boost APR.**
{% endhint %}
Key Benefits
* **Real-Time Adjustments:** The tax rate adapts automatically to market movements.
* **Buyer Rewards:** 100% of the collected tax is redistributed to buyers, promoting active participation.
* **Community-First Approach:** Primora.meme keeps none of the tax, it all goes back to the community.
* **Automatic Reset:** The tax resets to **0/0** once the base price is hit or after **30 minutes**, ensuring that the system supports healthy trading activity without being punitive.
The **Dynamic Tax Mechanism** is about empowering the community to seize opportunities and build a stronger, more resilient ecosystem together. If this mechanism doesn’t prove effective, we’ll revert to a **0/0 tax permanently**, ensuring fairness remains at the heart of Primora.
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