Really Burn helps Token in positive way? - page 5.

jaberwock

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Quote from: tsaroz on July 31, 2023, 06:56:54 AM

Burn limits the number of tokens on circulation as well the final number of supply. A burn by limiting the tradable tokens should be able to increase the demand of the token making it's price expensive. But if the release of tokens are larger than the burn amount, it would keep on increasing the circulating coins hence the burn would have no effect.
Burn of Shiba Inu should yield a positive boost on price, if not at the moment, eventually it would have a positive effect.

I realize that it is going to be important to burn some part of the supply to decrease the supply so even if there is same level of demand then lower supply would make the price go up. However, it doesn't work for a lot of people considering the fact that we are facing situations where demand is so low that supply could be much lower and it still doesn't change anything.

I understand that it will not be at a point where it is reaching to a new level, but as long as we could end up being a bit different, it should be fine. Just get some hype, get some people very happy regarding the burn, that should be how it is and that should be how it could improve. Unfortunately not a lot of people are happy about it currently, not for many tokens at least, they just ignore it and price doesn't change much.

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Quote from: GreatArkansas on July 30, 2023, 06:56:25 PM

For the long term I can see it's good because if supply is limited and there is token burn, supply is just decreasing over time.
But if the project is trash, these burning thing is just some kind of marketing to lure people into investing in their projects showing that the price could go up.

Burn can work out if the project is actually developing and reaching some new milestones. There are many projects that have been down in the dumps and have stopped buring tokens. Limited supply and burn means a gradual rise in price if the trading is continuing properly on good exchanges. However this is not always possible and most projects die out quickly.

I think the best way to assess these projects is to maintain a chart of how your chosen projects have done in the last 2years and then only decide whether to invest in it.

Wahyuihib

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indeed, as said, burning tokens aims to increase the value of these tokens. but what you need to remember is that in the world of trade, the value of an item increases if the demand for that item increases. so even if the token is burned if the demand for the token does not increase, the value will definitely be the same

JeffBrad12

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Quote from: Yamifoud on July 31, 2023, 08:50:48 AM

We thought before that burning tokens will help to grow its price because that is what they have said and these developers make a promise. A lot of people got fool by such a thing. Investors had expected too much from that but what they have seen after is nothing. It is a failed strategy and so people don't believe it anymore. Honestly, what makes a price grow in a particular project is based on how valuable it was. But these shitcoins and useless projects, no matter how much tokens they burn, it doesn't change as it remains worthless project.

the value comes from the demand, reducing total supply if nobody is looking for the coins will simply means futile attempt. thats what happened with so many shit coins out there, they think their coin is so good if they reduced their total supply they will immediately become something of high value but thats just not true at all.
mainly because demand is what determine the prices of these coins in general, even if there is only 1% of total supply left after burning if there's no demand then the coin is as good as useless.
so many coins out there never do burning and still getting good value because they are just that good fundamentally.

KiranKBS

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Quote from: Apocollapse on July 31, 2023, 03:53:44 AM

Can you define what is the positive way you refers to?

Hello Sir, postive way i meant increasing Market cap and price token increase!

Mpamaegbu

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Yes, token burning is a positive thing in tokenomics as it helps reduce maximum supply and expectedly creates scarcity. Scarcity creates demand. Demand causes price to flip. However, it's not the only thing that should cause price to rally up. I think use-case or utility of a token is more important than its burning. If a token has utility that investors already know of, and then the project decides to burn; that becomes an instant spike in price to the upside. I must confess that most noob investors would rather think of token burning than they think of its utility.

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Quote from: KiranKBS on July 30, 2023, 08:09:44 AM

For example, Shiba Inu is burning tokens aggressively and is it really helping them?

May be i am noob here and happy to hear from experts!

I believe this topic will be useful for someone too!

Sometimes its psychological in my opinion. People thinks that when supply become shorts its become valuable. But in the essence of law of supply and demand thats true. But it depends on the tokenomics of the project. Apparently it could be a bluff but others work on it like literally pumping when there is a news.

Yamifoud

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We thought before that burning tokens will help to grow its price because that is what they have said and these developers make a promise. A lot of people got fool by such a thing. Investors had expected too much from that but what they have seen after is nothing. It is a failed strategy and so people don't believe it anymore. Honestly, what makes a price grow in a particular project is based on how valuable it was. But these shitcoins and useless projects, no matter how much tokens they burn, it doesn't change as it remains worthless project.

tsaroz

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Quote from: KiranKBS on July 30, 2023, 08:09:44 AM

Hi,
Some How this Burn Buzz word stuck in my mind and i didn't see practical results so far in any successful token.

For example, Shiba Inu is burning tokens aggressively and is it really helping them?

May be i am noob here and happy to hear from experts!

I believe this topic will be useful for someone too!

Burn limits the number of tokens on circulation as well the final number of supply. A burn by limiting the tradable tokens should be able to increase the demand of the token making it's price expensive. But if the release of tokens are larger than the burn amount, it would keep on increasing the circulating coins hence the burn would have no effect.
Burn of Shiba Inu should yield a positive boost on price, if not at the moment, eventually it would have a positive effect.

Wexnident

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It's one way of helping the coin increase in demand since supply would decrease, meaning there are fewer coins for anyone who wants to buy it. Emphasis on "one" though, since it's not the only factor that involves demand. If a highly demanded coin started burning to reduce its supply, then its price would most likely soar, but if a not so demanded coin suddenly started burning in an attempt to stoke the economy, chances are nothing is really going to change. There might be a change in a day or two, but that's about it, it wouldn't even be that big imo. It'd probably drop down to it's regular price after that.

yazher

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This does not apply to all altcoins because others don't have anything to offer from the start that's why the only thing they can do is to burn some of their tokens to simply give the investors assurance that their altcoin is getting some momentum and it will increase its price soon. Others like Shiba Inu are doing a great job while their market is healthy, they choose to spice things up by burning some allocations of their tokens which will be no doubt the best thing to do in order to increase the price of their token and by the way, I read the news yesterday that they are gaining more investors and the price of Shiba Inu is increasing because of this event.

Apocollapse

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Can you define what is the positive way you refers to?

It will decrease the supply and technically make it more scarce, so the price would increase, it's correct for short term because the supply is unlimited. After all decreasing the circulation supply when the total supply is unlimited is pointless, burning or not, it's always centralized and the developer hold most of the coins.

wxa7115

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Quote from: KiranKBS on July 30, 2023, 08:09:44 AM

Hi,
Some How this Burn Buzz word stuck in my mind and i didn't see practical results so far in any successful token.

For example, Shiba Inu is burning tokens aggressively and is it really helping them?

May be i am noob here and happy to hear from experts!

I believe this topic will be useful for someone too!

Burning coins if I am not mistaken got popular a few years ago as a gimmick to try to make it seem as if by burning those coins then the price of the remaining coins will become higher.

But this brings an uncomfortable question, why the developers did not created their coin with a smaller supply to begin with? And it is obvious they refused to do so as they wanted to use burning their coins as a market strategy to create attention for their coin, however as we know for any asset to become valuable its supply not only needs to be on the low side but its demand needs to be high, as well and while burning tokens can reduce the supply, it does absolutely nothing to increase the demand.

danherbias07

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Lesser supply, higher value. But it doesn't always work that way.
In the past, I've seen an ICO cut their total amount of coins by three zeros (000) the billions of coins became millions, and yet the value was just glued unto. There was a window of an increase in market value but it didn't even last a day. Simply because the coins that all the holders have was also cut by three zeros so you cannot even say they did a burning mechanism, just an adjustment.
What Shiba Inu is doing may have the same effect as well. They have too many coins being held and on their stock plus they are a meme coin so the probability of the value going up is not that high. I'd stick with other coins with real projects behind them.

GreatArkansas

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For the long term I can see it's good because if supply is limited and there is token burn, supply is just decreasing over time.
But if the project is trash, these burning thing is just some kind of marketing to lure people into investing in their projects showing that the price could go up.

TastyChillySauce00

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Burn will not help the price of token until it will always able to burn significant amounts of tokens that can affect the circulating supply. Keep in your mind if there are so many fake burn being made by the stupid developers.

Burn will not instantly pumping the price of token. This depends on how good the development from project.

o48o

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Quote from: KiranKBS on July 30, 2023, 08:09:44 AM

Hi,
Some How this Burn Buzz word stuck in my mind and i didn't see practical results so far in any successful token.

For example, Shiba Inu is burning tokens aggressively and is it really helping them?

May be i am noob here and happy to hear from experts!

I believe this topic will be useful for someone too!

Technically yes, but that depends on so many things. Starting from how much is going to be burned, who is burning them and in what rate? How do they acquire the burned tokens? Do they buy them from the market and continuing to do so or are devs burning their own stash that they wouldn't use anyway? (which wouldn't make anything but artificial meaningless difference to circulating supply.

As a rule of thumb; burning technically always helps the price grow. In reality it often doesn't as there are just too much to burn in order it to have any effect.

JeffBrad12

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it all always comes down to the demand for the price to go up regardless of how much token are burned.
the thing is that so many project are doing this just to attract attention, but they fail miserably, some of them also burning their token decreasing the total supply just because why not, and as a result, the price stays the same even sometime it goes down hill.
these burning are part of strategy that could further helps increase the price of a project but of course it needs demand and being the center of attention first so that investors will notice that this token might be promising, though if the coin or token is pure garbage then many wouldn't care.

nelson4lov

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Quote from: KiranKBS on July 30, 2023, 08:09:44 AM

Hi,
Some How this Burn Buzz word stuck in my mind and i didn't see practical results so far in any successful token.

For example, Shiba Inu is burning tokens aggressively and is it really helping them?

May be i am noob here and happy to hear from experts!

I believe this topic will be useful for someone too!

Burn mechanisms used to be a key driver for upside token drive but the story has changed in recent times. Maybe in 2017-2020 but not anymore. The way the mechanism works is that some tokens are taken out of circulation. When this happens, it is usually perceived as a positive event since decreasing supply is believed to mean that price go up:

Supply goes down, price go up. (similar to bitcoin halving event where mining rewards get slashed in half).

However, most of these projects don't have a fixed total supply. There's usually an inflation that doesn't get offset by the burn events.

teosanru

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Quote from: KiranKBS on July 30, 2023, 08:09:44 AM

Hi,
Some How this Burn Buzz word stuck in my mind and i didn't see practical results so far in any successful token.

For example, Shiba Inu is burning tokens aggressively and is it really helping them?

May be i am noob here and happy to hear from experts!

I believe this topic will be useful for someone too!

Actually as per basic economics it does makes some sense as if you see the demand is the same it's the supply which gets reduced and if this thing happens, it's very obvious that the equilibrium gets disturbed if this thing happens and therefore ideally there should be a price increase. But the problem that many market theorists tell is that there is no real gain that flows because the token that are burnt are already with the team and were already not part of the flow so it doesn't really impacts the price.

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