When PAPER is below target, the Shredder opens.

The Shredder

The Shredder is the contraction mechanism. While PAPER is below target it lets a participant burn PAPER and receive RECEIPT, subject to the system's limits. Burning removes PAPER from circulation: less PAPER outstanding during a below-target period, paired with a future claim.

RECEIPT redemption

RECEIPT is that claim. It is designed to redeem for PAPER at a premium once PAPER is above the 1.01× threshold and the redemption reserve can cover it. This reserve is a separate PAPER balance the Treasury itself builds from a share of above-target prints, and from any print made while no PLATE is clamped. That is not the Ink Reserve, which holds SPY for buybacks and is a different pot entirely. Read when a print reaches clamped PLATE for how that PAPER accumulates.

The premium rises with how long you hold it: 2% at four runs, 5% at eight, 10% at sixteen. It applies only to RECEIPT you shredded yourself. RECEIPT acquired by transfer carries no holding premium, because it never accrued one. It is not PAPER, not SPY, and not a guaranteed claim: redemption depends on the ratio and on reserve capacity, and it can be delayed, limited, or unavailable.

Shredding exchanges one set of risks for another. Read Security & Risks before using it.