# Capital Flows

This page is the protocol-wide map of sources, uses, and deployment. It intentionally does not repeat the parameters of each mechanism; each row links to its canonical definition.

## Inflows

| Source | What enters the Treasury | Canonical mechanism |
| --- | --- | --- |
| SHYT trading tax | Tax-funded SHYT buybacks during the cold start | [SHYT](/shyt) and [Phase I](/launch/phase-i) |
| Genesis main channel | USDG from subscribers (HOLIGenesis writes `holiCredit`; HOLI after the USDG pool) | [HOLIGenesis](/launch/opening-balance-sheet#holigenesis) |
| Seigniorage tax | USDG paid to release newly minted HOLI accrued by sHOLI | [Seigniorage Tax](/supply/seigniorage-tax) |
| Protocol-owned income | Mint-to-swap proceeds and other approved HOLI-side income; the HOLI sell burn is not an inflow | [Fee Structure](/treasury-mgmt/amm-fees) and [Mint-to-Swap](/supply/mint-to-swap) |

These are sources, not a single chronological sequence. SHYT tax operates before HOLI exists and continues afterward. Seigniorage-taxed emission and mint-to-swap require a live HOLI market.

The complete transformation from SHYT trading into initial HOLI backing is defined in the bootstrap path below.

## Uses and outflows

Treasury capital is divided into undeployed external assets and deployed external assets in Treasury-owned pools. Targets are [Treasury Asset Buckets](/treasury-mgmt/buckets); execution is [Asset Admission & POL Deployment](/treasury-mgmt/admission).

The team management mint is an outflow of ownership rather than Treasury assets: new HOLI goes to the dev address without matching assets entering the Treasury. It increases external supply and dilutes NAV. Its sole definition is [Team Tokenomics & Management Mint](/dual-token/team#holi-team-management-mint).

Holders normally exit through protocol-owned pools. Any discretionary use of undeployed reserves for a below-NAV market buyback requires the governance decision in [sHOLI Staking](/staking#staker-rights-and-voting-scope); it is not automatic NAV redemption.

## Deployment loop

**Treasury inflow → undeployed external assets → governance-approved external-asset/HOLI POL → routing activity and HOLI sell burns**

Pairing HOLI minted for a Treasury-owned pool stays in <Md expr="S_t^{\mathrm{treas}}" />. It does not enter external supply merely because the Treasury added liquidity. The accounting identity is [NAV Definition](/nav/definition), and the complete list of authorized printers is [Mint Paths](/supply/paths).

## SHYT → HOLI bootstrap path

The path from community tape to initial HOLI backing is:

**SHYT trading → tax income → Treasury SHYT buybacks → SHYT/HOLI POL → HOLI opens with backing**

1. SHYT, the community MEME, produces trading; flow is the input. Its 5% tax splits Treasury / development for the life of the tax.
2. Before HOLI exists, the Treasury share accumulates in the temporary Safe; at about $200,000 USD it is transferred into the Treasury contract to open Genesis. Rates are on [SHYT](/shyt); custody is in [Phase I](/launch/phase-i).
3. Treasury funds buy back SHYT until the [Phase I](/launch/phase-i) trigger.
4. That after-tax-buyback SHYT becomes the external side of Treasury-owned SHYT/HOLI POL. It is a project asset and counts in NAV at **1×**, never 2×; the position provides reserve, exit, and routing from day one.
5. HOLI therefore opens as a share of a Treasury that already owns a SHYT/HOLI market, rather than an empty wallet. HOLI sells burn 1% of their input instead of creating a fee asset.

USDG subscribed at Genesis is additional capital; it is not part of this SHYT bootstrap path. Nor do the tokens become convertible one-for-one: SHYT holders buy HOLI at the market price through the standing green-channel pool.