> For the complete documentation index, see [llms.txt](https://azimuth-finance.gitbook.io/azimuth-finance-whitepaper/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://azimuth-finance.gitbook.io/azimuth-finance-whitepaper/azimuth-finance/the-bonfire.md).

# The Bonfire

Our smart contract has a built in mechanism for automatic token burning. 1% of the purchase and  1% of the sale of all traded $AZM are burned in **The Bonfire** (sent to a dead wallet that no one has access to). The more the token is traded, the more it gets into the fire, reducing the circulating supply. 

The main advantage of constant burning of working capital is that due to its deflationary nature, the high cost of each $AZM token is provided, which increases the individual value. This is a good incentive for holders to keep tokens as long as possible.