Next voting campaign on Freedom DAO is coming by your popular demand. “Would you like to burn 25% of the total BTZ Supply?
Here’s what you need to know about token burning so you can make the right mind for the vote!
What is Token Burning?
Token burning is the process that effectively removes tokens from the available supply.
It involves sending them to a wallet address that is outside the network, rendering the tokens unusable.
Why do tokens need to be burned?
1️⃣Supply Reduction: Burning tokens reduces the total supply, creating more scarcity and reducing inflation.
2️⃣Economic Control: Token burning can be used as a mechanism to manage the token’s economic dynamics, influencing market liquidity, and token distribution.
The Notable Types of Token Burning
🔥Proof of Burn (PoB):
This method is often used as a consensus mechanism in blockchain networks, where participants can “burn” their tokens to prove their commitment and earn the right to validate blocks.
🔥Buyback and Burn:
Buyback and Burn: In this method, a project or platform uses its revenue or profits to buy tokens from the market, reducing the total supply. This action aims to increase scarcity of the remaining tokens.
🔥Transaction Fee Burning:
Some blockchain networks or decentralized applications (dApps) burn tokens as part of their transaction fee mechanism. When users conduct transactions or interact with the platform, a portion of the transaction fees is burned, reducing the token supply over time.
🔥Token Swap or Conversion:
This type of token burning involves exchanging or converting tokens from one blockchain to another. Tokens from the original blockchain are typically burned to generate equivalent tokens on a different blockchain, ensuring a controlled migration of value and liquidity.
🔥Lost or Inactive Token Burning:
Tokens that are considered lost or held in inactive addresses can be burned to reduce the overall supply.This type of burning aims to account for tokens that are permanently inaccessible or abandoned by their holders.
Prepare your voting power by accumulating BTZ. The more you accumulate, the greater your voice. Additionally, for new users, get your Freedom Passport here.
Data from: https://www.investopedia.com/tech/cryptocurrency-burning-can-it-manage-inflation/#toc-is-burning-cryptocurrency-good-or-bad
*Cryptocurrencies and Digital tokens are highly risky; investors may lose all investment money. Investors should study information carefully and make investments according to own risk profile.The BTZ token is developed by Bitazza Group. As a result, there may be potential conflicts of interest.
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