Welcome to UpBots Academy, Readers! In this article we will break down what token burning means and what benefits token burning brings to investors.
“Calm down Brian, burning is a good thing in crypto, no need to call firefighters!”
Token burning is the process of permanently removing tokens from circulation to reduce the total supply. To explain this process and how burning is being done we will take the UpBots Token (UBXT) as an example.
We will briefly explain the initial UBXT tokenomics design in a few sentences. For more details please check our circulating supply article here…
UBXT was designed to have a maximum supply of 500 million tokens. Since the UpBots platform launch we have started to collect performance fees based on the trading bots return on investments, and this is when the UBXT burning program has started as well.
“Yes Brian, trading bots performance is cool, especially because your beloved DOGE/USDT performed over 750x in 10 months! That’s how you cover your travel expenses!”.
In short, this means that the more people use the UpBots trading bots, the more transaction fees are being paid in UBXT and the quicker the supply of tokens decrease from 500 million to our goal of 250 MILLION UBXT(50% of SUPPLY BURNED).
As of the 17th of November 2021 as a portion of performance fees collected, a total of 217,998.57 UBXT has been burnt. Burnt UBXTs can be tracked on blockchain at the following address: 0x000000000000000000000000000000000000dead
Token burning is mostly used by altcoins, such as Binance Coin (BNB) and Shiba Inu (SHIB) which allows scaling of the token and controlling the tokens in circulation; in a positive way.
It is also a tool applied in order to encourage investors – tokens continuously being burnt means the price will keep balance. The token burning mechanism is purely a cryptocurrency specific application and the “burning” process does not take place in traditional currencies.
Covid-19 reminded us a fact about traditional printed money and central banks policies – there is no maximum or even pre-decided strict total supply of any paper money in the world.
So, in this scenario, a central authority decides about increasing the total supply that affects billions of people’s lives by making them have less purchasing power.
The beauty of blockchain however means that everything in terms of the total, the max and the circulating supply is decided during pre-launch stage. And UBXT is a part of it.