Hello to my friends who love life and keep smiling despite all kinds of negativity. In this article, I will talk about "COIN BURN", which we have been hearing frequently lately. What is a coin burn? What is the purpose of making it? What kind of return does it have to the investor? We will try to find answers to these questions ...
Let's start…
Coin Burn is where digital currency miners and developers remove tokens from circulation, slowing inflation rates or reducing the total supply of cryptocurrency tokens in circulation.
To remove tokens from circulation, miners and developers take these tokens and then send them to private addresses with private keys that cannot be obtained. Without access to a private key, no one can access these tokens for use in transactions. Thus, the tokens are rendered unusable. Developers and miners hope to make the remaining tokens in circulation rarer and therefore more valuable by reducing the number of tokens in supply.
In fact, this process is very similar to the idea of ??a listed company buying back its stocks. These types of companies use cash on hand to repurchase their shares, thereby reducing the total amount of shares outstanding. This process increases the value of the shares remaining in circulation.
Coin Burn is a natural mechanism to protect against Distributed Denial of Service Attacks (DDOS) and spam. Basically, network users pay a small fee to execute a transaction. The implementation of the Smart Contract also requires a gas fee on the Ethereum network. The destruction of digital currencies takes a similar approach. Instead of paying miners a transaction fee, some projects implement automated token destruction. Accordingly, a small percentage of the transaction is automatically destroyed.
It is not directly integrated into the code and can only happen once or be executed regularly.
Binance carries out the coin burning process on a regular basis. 14 coins have been burned so far. 15. It will be in the month of April. Regular burning of tokens plays an important role in the valuation of BNB.
Coin burns made on Binance
Source by blog.crypto.com
25 Marta is preparing to launch its own blockchain, cryptocurrency exchange CRYPTO.COM has burned 70 billion CRO (Crypto.com Coin) coin. The coin burning process was described as "the largest coin burning process in history". Stating that 10.4 billion tokens are locked in smart contracts, the exchange announced that these tokens will also be burned when unlocked.
According to the latest updates from Klever (KLV), a universal platform for storing and transferring cryptocurrencies, the massive KFI mining event took place. In this context, the $ 77 million KLV token in circulation was destroyed. 22 - 25 March
My friends, investors should interpret this coin burning as a positive signal from the developers. All projects try to generate maximum added value for investors and users. By destroying the tokens in the network in a sustainable way, it solves numerous problems and increases the value development.
As I always said, listen to everyone, decide for yourself ...
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