> For the complete documentation index, see [llms.txt](https://kayen-finance.gitbook.io/docs/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://kayen-finance.gitbook.io/docs/protocol-mechanics/kayenfi-v3/protocol-concept/token-integration-issue.md).

# Token Integration Issue

## Fee-on-Transfer Tokens

Fee-on-transfer tokens deduct a small percentage from each transaction. This behavior can disrupt protocol logic that assumes exact transfer amounts.

In Kayen Finance, these tokens:

* May not function reliably with standard swap or router mechanisms.
* Could lead to mismatched balances and eventual swap failure.

{% hint style="info" %}
Mitigation strategies:

* Token creators can deploy a wrapper contract that normalizes transfers by handling fees internally.
* Alternatively, a custom router tailored to fee-on-transfer logic can be implemented to manage deductions transparently.
  {% endhint %}

***

## Rebasing Tokens

Rebasing tokens periodically adjust their balances (e.g., expanding or contracting total supply). While KayenFi allows pool creation and swaps involving such tokens, liquidity providers (LPs) may face unexpected outcomes:

* If a negative rebase occurs while an LP position is active, the underlying value of provided liquidity may diminish without recourse.
* Protocol logic doesn’t compensate for these contractions, exposing LPs to rebase-related loss.

{% hint style="warning" %}
Key consideration: Integrating rebasing tokens requires LPs and developers to be aware of rebase mechanics and adjust strategies accordingly, whether through risk modeling or alternative pool structures.
{% endhint %}

## Considerations for Kayen Finance Integrators

1. **Assess token behavior:**

   Before integration, tokens with transfer fees or rebasing capabilities should be evaluated carefully.
2. **Use wrappers or custom routers:**

   For fee-on-transfer tokens, use wrappers or custom routers to preserve swap integrity.
3. **Avoid passive strategies for rebasing tokens:**

   Do not rely on passive LP strategies for rebasing tokens unless the economic model accounts for supply shifts.
4. **Communicate risks clearly:**

   Inform liquidity providers and users about the risks when participating with unconventional token types.