# Transfer Fee Extension

Catwifhat ($CWIF) utilizes Solana's "Transfer Fee" Token Extension to implement its 4% auto-burn mechanism. This feature is a key aspect of $CWIF’s deflationary design, ensuring that with every on-chain transaction, a portion of the tokens is permanently removed from the total supply.

The "Transfer Fee" extension on Solana allows for the configuration of fees on token transfers at the protocol level. Here’s a summary of how it works and its main components:

1. **Fee Configuration:** For every on-chain transaction involving $CWIF, a 4% fee is automatically applied. This fee is set at the protocol level using Solana's Transfer Fee extension, which allows for precise fee configuration. See this fee in $CWIF's Extensions data [on Solscan](https://solscan.io/token/7atgF8KQo4wJrD5ATGX7t1V2zVvykPJbFfNeVf1icFv1#extensions).
2. **Fee Collection and Burn:** When $CWIF tokens are transferred, the 4% fee is deducted from the transaction amount. The fee is automatically deducted and withheld in the recipient's token account, out of circulation forever.
3. **Withdraw Authority**: The Token Extension "Withdraw Authority" can typically collect withheld transfer fees from recipient accounts. Since $CWIF does not have a Withdraw Authority, the 4% transfer fee is taken out of circulation forever. Verify that $CWIF has no Withdraw Authority [on Solscan](https://solscan.io/token/7atgF8KQo4wJrD5ATGX7t1V2zVvykPJbFfNeVf1icFv1#extensions).

The Transfer Fee system is designed to handle fees efficiently, ensuring scalability and compliance with token economics on the Solana blockchain. For the full information on the "Transfer Fee" extension, you can refer to the Solana documentation [here](https://solana.com/solutions/token-extensions).

*(page last updated June 13, 2024)*


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