Deflationary Tokens

[anknok]

No one has interest in deflation tokens because they have no good use case apart from reducing max supply over time through burning process, I will only invest if they have better use case thus with deflation feature too

I think you have to revisit your opinion after seeing the following stats

https://coinmarketcap.com/currencies/boom/

Despite so much criticism, this coin is doing good as per these stats. I think its a matter of time before we start seeing more capital flowing into this coin.

[1715104517]

1715104517

[Galley]

When the next project has absolutely nothing to offer good, they suggest burning tokens. And why to do this, why, as it were, to increase the value of coins, if they already cost nothing and no one needs. Why create what will be burned. I do not understand this principle.

[HunterUnchained]

The bubble is long burst with this one and I think its high time everyone recognises this and move on or risk getting caught between the Cross fire thus, losing funds. It was well worth the hype while it lasted. People need to understand that most of these deflationary tokens and projects have almost nothing to offer aside token burning rate and hype. Some of these projects did really well when the hype was the highest and people cashed in big but recently, they have been found out and people are leaving in droves and this has only led to their demise or diminishing interests.

[cryptoknightt]

maybe the goal is the less total supply, the price will increase because demand will continue but the number of tokens will continue to decline.
even then, if indeed their tokens are in demand or someone makes transactions every day and continues to grow.
otherwise it's the same as reducing the volume of the token because the number will continue to decrease since the token was released.

[Mighty_crypt]

I'm against this use case called deflation, what's the use of a project if all tokens supply got burnt out? It's more like a pyramid scheme to me, the early adopters will be the lucky ones that's if the project works out, the more the max supply keeps shrinking the higher the price will go but honestly apart from bomb token all the rest aren't doing so well, they have no volume

[masterrex]

I think it has no real purpose at all. but just like a pump and dump scheme, just like the Bomb deflationary token. Like any other deflationary token after all of its supply was burn it will be gone. but sometimes it will depend on the deflation design of any particular project. sometimes they have limit a small portion of that circulating supply to be permanent circulation in the platform.

[patz22]

I think it has no real purpose at all. but just like a pump and dump scheme, just like the Bomb deflationary token. Like any other deflationary token after all of its supply was burn it will be gone. but sometimes it will depend on the deflation design of any particular project. sometimes they have limit a small portion of that circulating supply to be permanent circulation in the platform.

Indeed! I do believe that this deflationary token is just like a hype as far as I can remember it happened sometime last year but most of them are just airdrop but this time is different, but let us see if this would be the best thing that will happen this year.

[OasisDre]

Deflationary feature is a very useful tool to create hype, that's how I see this feature, I haven't seen any big project using deflation as part of their features, inflation is just better, that's why we see only bomb like projects using this feature, newbies will definitely say I'm wrong but the more they get older in crypto space they will see

[SeanCasey]

A lot of ignorance in this thread. Sucks to read as an econ geek.

Deflation isn't a gimmick, it's a traders tax. Too high and people won't trade, too low and supply won't constrict.

Deflation takes time, if these cryptos can build an ecosystem, and destroy supply, it doesn't take much money to move them up.

BOMB, FUSE, SHOCK, SHUF, PYRO, FRAG, have dapps and features unique to themselves. If they can stay alive until bull season, they'll probably make it, they generally keep more value when crypto crashes. They have crazy volatility, they're like little Bitcoin's in that sense.

[Mianae]

The question should be where does tokens burnt come from? Are they bought from exchange if yes then there's room for price growth as supply is being reduced. If such token models can create utility for their projects, token burn will create scarcity and price will be up for everyone invesiin it.

[SeanCasey]

The question should be where does tokens burnt come from? Are they bought from exchange if yes then there's room for price growth as supply is being reduced. If such token models can create utility for their projects, token burn will create scarcity and price will be up for everyone invesiin it.

They're usually burning a % of every on-chain TX. Some have dapps that require keeping coins tied in a smart contract. Some pay dividends too

[DarkDays]

This is practically the same as the burn mechanism many coins use to incentivize growth.

I don't think the mechanism in-and-of itself is necessarily enough to ensure a token or coin will appreciate in value simply because the supply is lower.

Supply and demand-based appreciation only works when the demand outstrips supply, and I'd imagine that's unlikely to happen for a cryptocurrency that is trying to force appreciation rather than building utility value.

Then again, looking at how BNB has pumped as a result of its burns + increased utility value, it can work under the right circumstances.

[Ann Impas]

That's what most tokens become when it hits the market. Just a coin to dump. Which means what? Which means that the coin you initially thought can make you good money gave you close to none. If you want to survive in the market you must have originality. Because investors and traders are sick of tired on the same concept all the time. So if you look at it, There will only be a handful of projects out there that will not become a Deflationary token. That's just how it is.

[amos77978]

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 ?

it simply means the coin will become scarce.. it's a nice idea for crypto currencies.. but at thesame time..  for it to attain meaningful value it still depends on the demand of the coin.. even when tokens are destroyed on each transaction..

[enhu]

This is practically the same as the burn mechanism many coins use to incentivize growth.

I don't think the mechanism in-and-of itself is necessarily enough to ensure a token or coin will appreciate in value simply because the supply is lower.

Supply and demand-based appreciation only works when the demand outstrips supply, and I'd imagine that's unlikely to happen for a cryptocurrency that is trying to force appreciation rather than building utility value.

Then again, looking at how BNB has pumped as a result of its burns + increased utility value, it can work under the right circumstances.

There are DPOS tokens in which the supply keeps rising in supply but the price also is almost stable. The point is that utility is the best way to make the value of the token rise up without it its hard to see the light under the tunnel. Deflationary Tokens seem like a hype only much like you said about the previous project that just wanna burn tokens. I'm curing to see since every tx burns certain % which means part of the circulating supply is burned itself.

[RomiM]

Inflation in a controlled manner always bring rise in price as we have seen in bitcoin. On the other hand ethereum has no limit of how many eth will be generated and is also doing good. Deflationary tokens like BOOM can also make a good impact since they are bringing down the total coins in circulation. They are new that's y such coins have to answer so many questions.

[enhu]

Inflation in a controlled manner always bring rise in price as we have seen in bitcoin. On the other hand ethereum has no limit of how many eth will be generated and is also doing good. Deflationary tokens like BOOM can also make a good impact since they are bringing down the total coins in circulation. They are new that's y such coins have to answer so many questions.

Ether is a utility token which anyone with ERC tokens will need it when sending. Anyone engaging in ERC tokens and trading will need ETH that is why its not going zero. But with Boom its yet unclear what its purpose but just deflationary token not very different to the team burning the own tokens milestones after milestones yet the price didn't change over time.

[VIP BTC]

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 ?

I think this is an option for those who create coins with high supplay, so they cannot control the circulation of coins properly due to the high amount. And make prices worse. If they reduce the number of coins, this will improve the price of the coin for the better. As long as they are still developing the system in any way, the coins are worth investing.

[Twinkledoe]

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 ?

I think this is an option for those who create coins with high supplay, so they cannot control the circulation of coins properly due to the high amount. And make prices worse. If they reduce the number of coins, this will improve the price of the coin for the better. As long as they are still developing the system in any way, the coins are worth investing.

That is if they have real purpose in the market. But if they are just burning just to reduce their supply and rely on traders, I don't think their price will be valuable. Because sooner or later, traders will know that this token have no actual application and without it, it would be very hard to elevate its value. Traders will jump from one project to another so without their developments, they will just move on to the next one.

[DarkDays]

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 ?

I think this is an option for those who create coins with high supplay, so they cannot control the circulation of coins properly due to the high amount. And make prices worse. If they reduce the number of coins, this will improve the price of the coin for the better. As long as they are still developing the system in any way, the coins are worth investing.

I think you are overlooking the fact that it does not matter what your deflation rate is, if your coin is worth nothing, then no matter what you burn or deflate from it, it would stay worth nothing. You'd just be piggybacking on the investments made by early investors and artificially boosting the prices, which would not mean anything. It beats the purpose of having a "cryptocurrency" in the first place. This is a very subversive tactic used by corporates, and unfortunately most of us crypto lovers cannot wrap our heads around the subject and celebrate and crave deflationary tokens and coins without even understanding the repercussions.

These tokens are mostly just ticking time bombs that will explode in the face of noob investors eventually.