# How It Works?

Server Protocol is powered by a **single, modular smart contract** deployed on **Solana**, designed to manage all core functionalities of the ecosystem. This architecture ensures high efficiency, transparency, and low-cost interaction for users.

This section provides a **high-level summary** of how the system works. Each mechanism can be explored in detail via the dedicated pages linked below:

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## 🧠 Staking & Dynamic Emission

Users stake $SERVER to earn $BYTES — but with a twist. Emission rates are **dynamically adjusted**: they decrease for inactive users and reset only when they actively use their BYTES for proposals or votes.

[→ Learn more → Staking & Dynamic Emission](#staking-and-dynamic-emission)

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## 🗳️ Proposals & Voting System

Anyone can propose a project by burning $BYTES and paying a small $SERVER fee. Voting is permissionless and weighted by **reputation**. Votes can be **positive or negative**, and each user can vote **once per project**, with the ability to **change their vote** later.

[→ Learn more → Proposals & Voting](#proposals-and-voting-system)

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## 🧯 Burn & Supply Control

$BYTES are **permanently burned** upon each use. Combined with a dynamic emission model, this creates **natural scarcity** and rewards sustained engagement rather than passive holding.

[→ Learn more → Burn & Supply Model](#burn-and-supply-control)

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## 🏆 Grant Allocation

Projects that receive a **positive net score** (more upvotes than downvotes) become eligible to receive grants in $SERVER. These are distributed progressively based on on-chain milestones tracked via Grant Accounts.

[→ Learn more → Grant Allocation](#grant-allocation)

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## 📊 Reputation System

Users earn **Reputation Points** by participating with $BYTES. Points increase their voting power and decay over time when inactive — preventing manipulation by whales or dormant wallets.

[→ Learn more → Reputation System](#reputation-system)

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## 💎 Treasury-Backed Model

All $SERVER fees from actions (votes, proposals) are routed to a **Treasury Wallet** instead of being burned. These funds are later reinvested into grants and ecosystem growth, ensuring a **sustainable and circular economy**.

[→ Learn more → Treasury System](#treasury-backed-model)
