Deflationary Tokens

[philanthropist67]

I am well aware of coins with controlled inflation like BTC, where a finite number of coins will be generated at a controlled rate. Very recently I came across deflationary tokens where coins are destroyed whenever a transaction is made and they will end at some time.
My question is what is the purpose of creating such coins? Are they worthy enough to be invested ?

[1715093630]

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[VDraci]

It's amazing right? On every transactions tokens get burned but be hold my friend that's all there is to that coin, nothing more than this deflationary feature, how will this coin be useful to the public? Does it makes sense to invest on a token or coin because it's a deflationary token? The answer is NO

[Greatdev]

Many new altcoins are rushing this deflationary ability maybe because it attracts many investors to old deflation tokens but it doesn't make sense to invest on the coin because of the burn, real use case matters and burning tokens per transaction is not one of them

[Lantind]

I am well aware of coins with controlled inflation like BTC, where a finite number of coins will be generated at a controlled rate. Very recently I came across deflationary tokens where coins are destroyed whenever a transaction is made and they will end at some time.
My question is what is the purpose of creating such coins? Are they worthy enough to be invested ?

Maybe the team has a separate goal that we never knew, but so far I haven't found a deflation token where coins are destroyed every time a transaction is made, so if I may know what is that token?

[Festac]

Please kindly share the name of the token, many deflationary tokens I knew are almost dead now due to lack of use case, investors are now smarter to avoid projects that have no real life use cases because in a very short time they will become worthless

[Yogee]

Purpose?
The developers wanted to sell an idea that tokens with a deflationary supply model will in turn become scarce. You know what they usually say about scarcity right? The price will go to moon!!!

Worth it?
I personally do not see the point of tokens burning for every transaction made. It sounds good on paper but when you really think about it, that model is not sustainable in the long run. Burning can't go on forever because they cannot afford to have a zero supply. After years of hyping, they have to adjust the code and remove the burn rate. That will be the end for the token as deflationary.

[poodle63]

I am well aware of coins with controlled inflation like BTC, where a finite number of coins will be generated at a controlled rate. Very recently I came across deflationary tokens where coins are destroyed whenever a transaction is made and they will end at some time.
My question is what is the purpose of creating such coins? Are they worthy enough to be invested ?

They are not worthy to be invested. There are so many scam deflationary token and this idea is not needed by the community. one thing that you must remember if utility token is something that has been searching by the community. There was a lot of people know this idea will always related to the scam token.

[bitmover]

On every transactions tokens get burned but be hold my friend that's all there is to that coin, nothing more than this deflationary feature, how will this coin be useful to the public? Does it makes sense to invest on a token or coin because it's a deflationary token? The answer is NO

They are not worthy to be invested. There are so many scam deflationary token and this idea is not needed by the community.

Ofc buying a coin just because it has a deflationary economy makes no sense. However, a good project may burn tokens so the total supply goes down over time.

Ethereum Casper MAY have a deflationary economy in the future, according to Vitalik Buterin in official Ethereum Github:

Because of the lack of high electricity consumption, there is not as much need to issue as many new coins in order to motivate participants to keep participating in the network. It may theoretically even be possible to have negative net issuance, where a portion of transaction fees is "burned" and so the supply goes down over time.
https://github.com/ethereum/wiki/wiki/Proof-of-Stake-FAQ#what-are-the-benefits-of-proof-of-stake-as-opposed-to-proof-of-work

So, go buy ethereum if you think ethereum will ever reach PoS in ethereum 2.0

[Yudhisthir]

Certain trader came with the concept that supply limit is a prime factor for deciding the price of the coin and so came the time of deflationary coins. Though the limited numbers made it easier for manipulation, the coin with just a deflationary feature got no interest from investors. They were in fashion around 2016-17.
But not all deflationary coins are lost, there are other genre of coins that have specific purposes and are also deflationary are still going strong.

[South Park]

I am well aware of coins with controlled inflation like BTC, where a finite number of coins will be generated at a controlled rate. Very recently I came across deflationary tokens where coins are destroyed whenever a transaction is made and they will end at some time.
My question is what is the purpose of creating such coins? Are they worthy enough to be invested ?

That is nothing more but a gimmick, do not invest in those coins, they are trying to make you believe that as they keep destroying tokens that somehow this is going to make their coins more valuable and while without a doubt they are able to affect the supply side of the equation with this they are unable to affect the demand side, so it doesn't matter if they keep burning coins to the end of time if no one wants to have those coins it doesn't matter, as such you should not waste your time with projects like that.

[JHORN]

Do not invest on a coin because it's deflation token, I've done this in the past and the coins I hold are dead or about to, no good volume on exchanges anymore, Bomb token is the only last man standing and even this bomb token had no real use, maybe people just like the project that's why it's still alive today

[alani123]

Destruction of currency is more about economics rather than technology. It's true that a coin could be programmed to do that, but is it really worth to do that beyond a joke?
Economists have mostly focused on the concept of systemic (FIAT) money when discussing destruction of currency. Destroying crypto isn't the same as burning cash, because such transaction is permanent in crypto. But central banks are known to utilize the withdrawal of cash from the economy as a tactic.

However, introducing a measure that would burn money for every transaction would introduce bad disincentives in any economy. Imagine if you knew that by any transaction, some portion of your spent money would burn. Not go to someone else, but burn. That's a strong disincentive to transact, at all. And now bring that in the crypto sphere where there is real currency competition. You not have a coin that no one wants to spend, and can only derive monetary value from it in exchange for any other currency. Well congrats, you got yourself a coin poised to stagnate...

[Towerbreeze]

Inflationary
Deflationary
Burning max supply

All these should be just a feature for projects, don't invest in projects that only rely on these features, they have nothing good to offer you but losses

[Odebowa]

A deflationary token is one where tokens are removed from the market over time. Tokens can be removed from the market via a variety of methods including token buy-backs and token burns from the token creators.

The main issue that deflationary tokens present is that they will often be seen as a security in the eyes of regulators. This is because the deflationary mechanisms used to buy the tokens back from the market are generally dependent on the success of the company and if the company performs well, more tokens can be bought from the market which will often improve the health of the ecosystem, and if the company does poorly, they will not have the resources to buy as much off the market leading to an excess supply and often times, and unhealthy ecosystem. Because of this direct relationship between the success of the company and the health of the token ecosystem, these deflationary tokens will almost always be classified as a security.

In some cases they are ok to invest in. But let say 50/50

[LazerPanther]

Please kindly share the name of the token, many deflationary tokens I knew are almost dead now due to lack of use case, investors are now smarter to avoid projects that have no real life use cases because in a very short time they will become worthless

Yes, investors are much smarter right now and most of these altcoins are dead in this market. Investing in altcoins is a very dangerous investment, so it is important to consider if we want to invest in them.

[Iyanu14]

I am well aware of coins with controlled inflation like BTC, where a finite number of coins will be generated at a controlled rate. Very recently I came across deflationary tokens where coins are destroyed whenever a transaction is made and they will end at some time.
My question is what is the purpose of creating such coins? Are they worthy enough to be invested ?

The advent of deflationary tokens was thought to be a very novel idea that will bring fresh innovation to the crypto industry.  It was created with the aim of reducing supply when some amounts of tokens are burnt on every transaction.  The developers thought this will create a scarcity in the market thereby resulting in increase in the price of the token.  However, this idea have not been successful as several deflationary tokens were dead today.

[Valzador]

I am well aware of coins with controlled inflation like BTC, where a finite number of coins will be generated at a controlled rate. Very recently I came across deflationary tokens where coins are destroyed whenever a transaction is made and they will end at some time.
My question is what is the purpose of creating such coins? Are they worthy enough to be invested ?

Tokens that have deflation features will usually be stamped as digital gold just like bitcoin, but if each token transaction is burned, I think the tokens only want to get FOMO.
Typical short-term tokens.

[Krislaw]

If you're thinking of investing in deflationary token because of it's percentage of deflation or whatever, you should stop. Deflationary tokens was a trend about a year ago, most of them are no where to be found. No use case, just pump and dump.

The hype they have is reduction in supply making it scarce. Imagine 5% burn rate and you lose 5$ for every 100$ you send, it doesn't make sense in any way.

[HunterUnchained]

Deflationary coins and tokens became a thing late last year and early this year for the purpose of actually creating some level of steady price appreciation due to the fact that, their supply decreases with every successful transaction made. It was quite successful with the likes of BOMB token doing extremely well in that period. Unfortunately, it became abused due to greed and developers looking to take advantage of the situation and cashing out. Several poorly developed projects caught in on the vibe and the idea become saturated with a lot of poor projects leading to people losing interest in investing in any deflationary projects. Only a few are still doing well at this time.

[pakhitheboss]

I am well aware of coins with controlled inflation like BTC, where a finite number of coins will be generated at a controlled rate. Very recently I came across deflationary tokens where coins are destroyed whenever a transaction is made and they will end at some time.
My question is what is the purpose of creating such coins? Are they worthy enough to be invested ?

If I am correct you mean to say that for transaction made the will burn the coin. Why not create a certain number of coins and then release it in the market?

Now if I want to transfer the coin or pay to someone using that coin then after the transaction is complete the coin gets destroyed and no one can use it. So, where it the adaptability, how will they create a market for that coin?

I do not understand the concept at all.