diff --git a/onchain/deployments-local.json b/onchain/deployments-local.json
index c9e40aa..6fc4bfd 100644
--- a/onchain/deployments-local.json
+++ b/onchain/deployments-local.json
@@ -1,7 +1,7 @@
 {
   "contracts": {
-    "Kraiken": "0xe527ddac2592faa45884a0b78e4d377a5d3df8cc",
-    "Stake": "0x935b78d1862de1ff6504f338752a32e1c0211920",
-    "LiquidityManager": "0xa887973a2ec1a3b4c7d50b84306ebcbc21bf2d5a"
+    "Kraiken": "0xff196f1e3a895404d073b8611252cf97388773a7",
+    "Stake": "0xc36e784e1dff616bdae4eac7b310f0934faf04a4",
+    "LiquidityManager": "0x33d10f2449ffede92b43d4fba562f132ba6a766a"
   }
 }
diff --git a/onchain/src/LiquidityManager.sol b/onchain/src/LiquidityManager.sol
index 9ab8434..32b6a13 100644
--- a/onchain/src/LiquidityManager.sol
+++ b/onchain/src/LiquidityManager.sol
@@ -76,9 +76,12 @@ contract LiquidityManager is ThreePositionStrategy, PriceOracle {
     function uniswapV3MintCallback(uint256 amount0Owed, uint256 amount1Owed, bytes calldata) external {
         CallbackValidation.verifyCallback(factory, poolKey);
 
-        // Handle KRAIKEN minting
+        // Handle KRAIKEN minting - use existing balance first, then mint only the difference
         uint256 kraikenPulled = token0isWeth ? amount1Owed : amount0Owed;
-        kraiken.mint(kraikenPulled);
+        uint256 kraikenBalance = kraiken.balanceOf(address(this));
+        if (kraikenBalance < kraikenPulled) {
+            kraiken.mint(kraikenPulled - kraikenBalance);
+        }
 
         // Handle WETH conversion
         uint256 ethOwed = token0isWeth ? amount0Owed : amount1Owed;
@@ -211,9 +214,6 @@ contract LiquidityManager is ThreePositionStrategy, PriceOracle {
                 _recordVolumeAndPrice(currentPrice, fee1);
             }
         }
-
-        // Burn any remaining KRAIKEN tokens
-        kraiken.burn(kraiken.balanceOf(address(this)));
     }
 
     /// @notice Allow contract to receive ETH
diff --git a/onchain/test/SupplyCorruption.t.sol b/onchain/test/SupplyCorruption.t.sol
new file mode 100644
index 0000000..113ebb2
--- /dev/null
+++ b/onchain/test/SupplyCorruption.t.sol
@@ -0,0 +1,146 @@
+// SPDX-License-Identifier: GPL-3.0-or-later
+pragma solidity ^0.8.19;
+
+/**
+ * @title Supply Corruption Test
+ * @notice Regression test for issue #98: KRK Token Supply Corruption During Recenter Operations
+ * @dev Verifies that recenter() correctly mints tokens when liquidity increases, preventing deflation
+ */
+import { Kraiken } from "../src/Kraiken.sol";
+import "../src/interfaces/IWETH9.sol";
+import "@uniswap-v3-core/interfaces/IUniswapV3Factory.sol";
+import "@uniswap-v3-core/interfaces/IUniswapV3Pool.sol";
+import "forge-std/Test.sol";
+
+import { LiquidityManager } from "../src/LiquidityManager.sol";
+import { Optimizer } from "../src/Optimizer.sol";
+import { Stake } from "../src/Stake.sol";
+import { TestEnvironment } from "./helpers/TestBase.sol";
+import { UniSwapHelper } from "./helpers/UniswapTestBase.sol";
+
+contract SupplyCorruptionTest is UniSwapHelper {
+    address constant RECENTER_CALLER = address(0x7777);
+    address feeDestination = makeAddr("fees");
+
+    IUniswapV3Factory factory;
+    Stake stake;
+    LiquidityManager lm;
+    Optimizer optimizer;
+    TestEnvironment testEnv;
+
+    function setUp() public {
+        testEnv = new TestEnvironment(feeDestination);
+
+        (
+            IUniswapV3Factory _factory,
+            IUniswapV3Pool _pool,
+            IWETH9 _weth,
+            Kraiken _harberg,
+            Stake _stake,
+            LiquidityManager _lm,
+            Optimizer _optimizer,
+            bool _token0isWeth
+        ) = testEnv.setupEnvironment(false, RECENTER_CALLER);
+
+        factory = _factory;
+        pool = _pool;
+        weth = _weth;
+        harberg = _harberg;
+        stake = _stake;
+        lm = _lm;
+        optimizer = _optimizer;
+        token0isWeth = _token0isWeth;
+    }
+
+    /**
+     * @notice Test that recenter does not cause supply corruption
+     * @dev Reproduces the bug scenario: after buying tokens and calling recenter,
+     *      totalSupply should increase or stay the same, never decrease
+     */
+    function testRecenterDoesNotCorruptSupply() public {
+        // Fund liquidity manager with ETH
+        vm.deal(address(lm), 10 ether);
+
+        // Initial recenter to set up positions
+        vm.prank(RECENTER_CALLER);
+        lm.recenter();
+
+        // Record initial state
+        uint256 initialTotalSupply = harberg.totalSupply();
+        (address liquidityManagerAddr, address stakingPool) = harberg.peripheryContracts();
+        uint256 initialStakingBalance = harberg.balanceOf(stakingPool);
+
+        assertGt(initialTotalSupply, 0, "Initial total supply should be positive");
+        console.log("Initial totalSupply:", initialTotalSupply);
+        console.log("Initial staking balance:", initialStakingBalance);
+
+        // Simulate user buying tokens (price movement)
+        vm.deal(account, 5 ether);
+        vm.prank(account);
+        weth.deposit{ value: 5 ether }();
+
+        // Perform swap to move price
+        performSwap(5 ether, true);
+
+        console.log("Performed 5 ETH swap to move price");
+
+        // Call recenter
+        vm.prank(RECENTER_CALLER);
+        lm.recenter();
+
+        // Check final state
+        uint256 finalTotalSupply = harberg.totalSupply();
+        uint256 finalStakingBalance = harberg.balanceOf(stakingPool);
+
+        console.log("Final totalSupply:", finalTotalSupply);
+        console.log("Final staking balance:", finalStakingBalance);
+
+        // CRITICAL ASSERTION: Total supply should not decrease
+        assertGe(finalTotalSupply, initialTotalSupply, "BUG #98: Total supply should not decrease during recenter");
+
+        // Staking pool ratio should be maintained (within 1% tolerance for rounding)
+        if (initialTotalSupply > 0) {
+            uint256 initialRatio = (initialStakingBalance * 10_000) / initialTotalSupply;
+            uint256 finalRatio = (finalStakingBalance * 10_000) / finalTotalSupply;
+            uint256 ratioDiff = finalRatio > initialRatio ? finalRatio - initialRatio : initialRatio - finalRatio;
+
+            assertLt(
+                ratioDiff,
+                100, // 1% tolerance (100 out of 10000)
+                "Staking pool ratio should be maintained"
+            );
+        }
+    }
+
+    /**
+     * @notice Test multiple recenter operations don't accumulate supply corruption
+     */
+    function testMultipleRecentersPreserveSupply() public {
+        vm.deal(address(lm), 20 ether);
+
+        // Initial recenter
+        vm.prank(RECENTER_CALLER);
+        lm.recenter();
+
+        uint256 initialTotalSupply = harberg.totalSupply();
+        console.log("Initial supply:", initialTotalSupply);
+
+        // Perform multiple recenter cycles
+        for (uint256 i = 0; i < 3; i++) {
+            // Swap to move price
+            vm.deal(account, 2 ether);
+            vm.prank(account);
+            weth.deposit{ value: 2 ether }();
+
+            performSwap(2 ether, true);
+
+            vm.prank(RECENTER_CALLER);
+            lm.recenter();
+
+            uint256 currentSupply = harberg.totalSupply();
+            console.log("Supply after recenter", i + 1, ":", currentSupply);
+
+            assertGe(currentSupply, initialTotalSupply, "Supply should not decrease across multiple recenters");
+        }
+    }
+}