What do you see in burning tokens?

[s0nujamil]

been around crypto since long time, and every cycle I’ve seen projects burn a chunk of their supply, always framed as a way to support the community or increase utility. I see some people take it as a bullish sign becuz of this.

But is it really good for the token in long term? Recently an exchange burned their 30M+ BGB tokens, saying it’s to support holders, launchpool users, and builders in the ecosystem. the price did move after the burn, like it did last time in december back then it went up around 23% after the announcement. and they’ve been doing this consistently since they cut total supply down to 1.2B.

I don’t know if it’s all just optics or if it really helps the token long term, but looking at how BGB performed last year compared to other CEX tokens, maybe there’s more to it..

I'm kinda curious on how it can really work out at the end?

[hugeblack]

They can print whatever they want, so controlling the price is a simple equation based on supply and demand. If there is demand and you burn tokens (reducing the supply), the price will increase, and the opposite will happen when there is high demand.


In short, as long as there is demand, they make a profit.

[Charles-Tim]

They can print whatever they want, so controlling the price is a simple equation based on supply and demand. If there is demand and you burn tokens (reducing the supply), the price will increase, and the opposite will happen when there is high demand.


In short, as long as there is demand, they make a profit.

Some people thought that burning some coins or tokens supply will result to increase in price of the coin or token but those developers and coin founders are using it to deceive people.

Market Cap = Price of a coin * Circulating Supply.
If the supply is reduced, the marketcap will reduce.

Price of a coin= Marketcap/Circulating Supply
If the marketcap is reduced, the price will reduce back in a way that the burning will have no significant effect on the coin.

Coins that are not burned also increase in price. While a shit coin that is burned can become dead.

You are right for posting that demand is what that matters and not buring. They are only using it to deceive in investors.

[KryptoBull]

been around crypto since long time, and every cycle I’ve seen projects burn a chunk of their supply, always framed as a way to support the community or increase utility. I see some people take it as a bullish sign becuz of this.

But is it really good for the token in long term? Recently an exchange burned their 30M+ BGB tokens, saying it’s to support holders, launchpool users, and builders in the ecosystem. the price did move after the burn, like it did last time in december back then it went up around 23% after the announcement. and they’ve been doing this consistently since they cut total supply down to 1.2B.

I don’t know if it’s all just optics or if it really helps the token long term, but looking at how BGB performed last year compared to other CEX tokens, maybe there’s more to it..

I'm kinda curious on how it can really work out at the end?

Burning tokens is just one of many ways to decrease supply and selling pressure in the market, thereby driving up the price of the token and expanding the ecosystem by attracting more new users and investors. Binance has been very successful in burning BNB from CEX profits, however, I'm not sure if Bitget can successfully replicate that.

Token burning is only an effective method in the early stages of project development, it should not be overused. The #DevelopmentTeam  should provide valuable solutions for users and offer more useful services for them. Those are the real reasons for users to stay and use CEXs.

[ABCbits]

It's just way to create artificial scarcity and attempt to reduce supply (in supply/demand schema). Personally i'd be skeptical against such token, especially exchange token that usually have little practical benefit/usage.

[hugeblack]

The new model links quarterly burn volumes with the BGB amount used for on-chain gas fees through their wallet GetGas accounts. This is similar to bnb model yes?

Now, this is more of a promotion for the token than a discussion about it.
If this is true, the amount of the burn will be minimal and will not affect supply and, consequently, the price, but I don't believe this is what happened, otherwise it would have had no impact.