In the cryptocurrency market, there are many various ways to increase demand and boost the price of coins. Today we want to talk about one of them using the example of the $BIT Token - the native token of the Biconomy Exchange.
What is Deflationary Model in Cryptocurrencies?
A deflationary model in cryptocurrencies refers to a design where the supply of the cryptocurrency decreases over time rather than increases or remains constant. This is often achieved through mechanisms such as burning or destroying a portion of the tokens with each transaction or through periodic token burns conducted by the project developers.
In a deflationary model, the total supply of the cryptocurrency gradually decreases, leading to a reduction in the available tokens over time. This can create scarcity and potentially drive up the value of the cryptocurrency as demand outpaces supply. However, it's important to note that deflationary models can also have drawbacks, such as discouraging spending and promoting hoarding behavior among users.
Some cryptocurrencies implement deflationary models as part of their economic design to incentivize holding the tokens long-term and to create a store of value assets. However, the effectiveness and sustainability of these models depend on various factors, including tokenomics, community adoption, and the overall utility of the cryptocurrency.
What do You need to Know about $BIT Token Burning Models?
There are three ways to burn the $BIT token.
Method 1. Manual burning, which takes place every quarter, is carried out by the method of full or partial buyback of $BIT tokens from the market. This is done by using 50% of the profits earned by the exchange.
Manual burning address
Method 2. Deflationary model. This is the automatic burning of the $BIT Token, prescribed in its smart contract. This is the fastest and most efficient method of burning since any on-chain $BIT transaction is taxed at 6% and the entire amount is immediately burned.
Deflationary Burn Address
Method 3. Additional burning from the profits.
After the launch of futures trading on the exchange, we also intend to direct 50% of the profits received to the additional burning of $BIT tokens. This burn will be added to the manual quarterly burn.
These burning methods were created from the very beginning to ensure the deflation of the token and increase its useful utility properties, the stability of the development of the economic model of the $BIT Token.
This means that holders of #$BIT tokens will have not just a token in their hands, but will be able to participate in a full-fledged cryptocurrency market with a huge future and growth potential.
The $BIT token was burned manually just yesterday - this is a very important event for the exchange and the community.
The most significant advantage here is that BIT is an exchange token, like BNB for #Binance and KCS for #Kucoin, and none of these tokens have such burning models.
The deflationary model for the Biconomy exchange token was specifically designed to increase the popularity and attractiveness of the token and this model works very successfully.
Over the two years of the token’s existence, about 35% of all issued tokens have already been burned, and the burning will continue.
The exchange plans to burn at least 50% of all tokens over the next years.
As a result of this model, the token is considered a very stable and attractive asset in the cryptocurrency market.
Thus, now you are familiar with the deflation model in cryptocurrencies and the types of various token burnings.
There are many more different types of burning that you can explore on your own.
After all, if you do not educate yourself and develop, you may miss very important trends in the cryptocurrency market - because it never stands still and is in constant development and improvement.
Good luck with your trading and remember the risks!
