What Is Cryptocurrency Token Burning?
Coin burning happens when a cryptocurrency token is intentionally sent to an unusable wallet address to remove it from circulation. Cryptocurrency is “burned” when a coin is sent to a wallet address that can only receive coins.
A project burns its tokens to reduce the overall supply. In other words, it creates a “deflationary” event. The motivation is often to increase the value of the remaining tokens since assets tend to rise in price whenever the circulating supply falls and they become more scarce.
Practical Applications for Coin Burning
Removing an asset from circulation to adjust availability and value is not a new concept. For example, central banks adjust the amount of circulating currency to adjust that currency’s purchasing power. There are a few other practical reasons for burning cryptocurrency.
Burning tokens can be similar to a company buying back its shares. The company “returns the value” to its shareholders in this way. Crypto projects burn their tokens to achieve the same goal.
It isn’t guaranteed to increase the crypto’s value. In fact, many see little to no benefit from it.
Coin burning started becoming popular with cryptocurrencies in 2017 and 2018 when multiple coins, including Binance Coin (CRYPTO: BNB), Bitcoin Cash (CRYPTO: BCH), and Stellar (CRYPTO: XLM) burned tokens to cut supplies and boost prices. More recently, it has been a common strategy with newer cryptocurrencies that start out with massive token supplies.
MetaMine Token Burning Process
MTM is the native token of MetaMine Metaverse. Use it to exchange items and other assets with other players, or on market place. Earn MTM tokens by playing and use them to decide the future of the game!
The total circulation of MTM Token is 720 million, which will not increase.
To support its community, MetaMine has designed a token burning smart contract and guarantees users that it will always support them.
Token burning is not an isolated event in the MetaMine metaverse. To keep a healthy balance between demand and supply, MTM tokens are burned on a quarterly basis.
We approach this powerful mechanism in a systemic manner. The amount of tokens burn equals the amount of tokens deposited on MetaMine account balances.
MetaMine has committed to doing this until 8% of the total MTM token supply is removed from circulation. This amount can be increased but not decreased.
Coin burning on its own does not tell you whether a cryptocurrency is a good investment. There are both good and bad cryptocurrencies that burn tokens. By knowing how coin burning works, you can better understand the cryptocurrencies that use it.