# Core Mechanisms

1.  **GUP Conversion to SMT:** The exclusive output route for SMT is through the conversion of GUP (the native reward token acquired within the platform). This mechanism incentivizes user participation in platform activities such as content contribution, governance participation, and DeFi activities to earn GUP, which can then be converted into SMT. The conversion ratio is dynamically adjusted based on the platform's economic model and market conditions, ensuring the stability and fairness of the economic system.


2.  **Participation Incentives:** Users earn GUP by engaging in platform development and community activities, including but not limited to content creation, project voting, and community governance. This mechanism is designed to reward substantive contributions to the platform, stimulate active user participation, and promote the healthy development of the ecosystem.


3.  **Deflationary Strategy:** To ensure the long-term value of SMT, the platform will implement a deflationary strategy, including regular buy-back and destruction of SMT and reducing the conversion rate from GUP to SMT through specific mechanisms. These measures aim to decrease the circulating supply of SMT, enhancing its scarcity and value.


4.  **Governance and Voting:** SMT holders will gain voting rights in platform governance, participating in voting on key decisions, including but not limited to fee structure adjustments, new feature introductions, and the induction of new partners. This mechanism ensures the democratized management of the platform, allowing community members to directly participate in various aspects of platform development.


5.  **Cross-Chain Interoperability:** To enhance the liquidity and application scope of SMT, the platform will support the cross-chain transfer of SMT across different blockchain networks. By establishing cross-chain bridging protocols, SMT will be able to circulate freely among all supported blockchain networks, providing users with a wider range of application scenarios.


6.  **NFT and Metaverse Applications:** SMT will play a significant role in SMARTMALL's NFT marketplace and Metaverse platform. Users can use SMT to purchase and sell NFTs, engage in the construction and transactions of virtual worlds, making SMT a pivotal bridge connecting digital and virtual assets.

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