> For the complete documentation index, see [llms.txt](https://equilibriumd.gitbook.io/equilibrium/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://equilibriumd.gitbook.io/equilibrium/features/auto-liquidity-and-transfer-tax.md).

# Auto Liquidity & Transfer Tax

Burn and Automated Liquidity : 5% transfer tax on each transaction

* 4% transfer tax will be added to the DROP-BNB LP liquidity pool through the contract automatically. 
* 1% will be automatically burned.

For every transaction of DROP token, 4% of it will be converted to DROP-BNB LP token & 1% burned. This results in  higher liquidity that will reduce the price impact, allowing users to trade with a lower slippage tolerance.