How the token burn mechanism works for a crypto project ?
The token burn mechanism is a method by which a project tries to establish a price stabilization.
It is also a way to help create and maintain a demand for a token by way of sending a part of a supply out of circulation and never let it come back into active circulation.
It is a method by which the demand and supply can be matched in such a way that the demand is always more than the supply.
A lot of this depends on the number of investors in the market and how they see the current and future potential of a project and its token.
How the burn mechanism is working in and for the Robiniaswap project ?
Robiniaswap has been a DeFi project that began its operations on October 1st 2021.
Investors flocked to the Robiniaswap Pools https://robiniaswap.com/pools
and the farming opportunity at https://robiniaswap.com/farms
The good APR was too good to resist and a lot of people jumped in. Long story short they staked and farmed and earned a lot of RBS tokens and dumped them onto the market.
As they say a picture is worth a thousand words so if you can read a technical chart or even have a vague idea about charting then the following chart sums up as to what happens when an good earning opportunity comes by.
Here every one jumps in to make a good quick buck.
In this case the quick buck was in the form of the RBS tokens that was earned quickly as well as dumped quickly onto the market.
This is what the charts tell a story in picture source: coinmarketcap.com
Now this is how the token amounts being burn has been going up steadily.
The interesting Part
If one checks the number of tokens being burnt on 4th Nov 2021 it is a number that comes to 250955 RBS tokens burnt on 4th Nov 2021
as compared to 243783 RBS tokens burnt on 3rd November 2021
Source : Bscscan.com
That is 7172 tokens more then the previous day.
If we look at the supply of tokens added we find that the supply was 605536 RBS on 3rd Nov 2021
On 4th Nov 2021 the supply increased to 620027
That is 14491
So for 14491 RBS added we see 7172 RBS tokes burnt.
Thus we see a whopping 50% of the supply added got burnt.
So what is the impact of this burn on the price
The price has been hovering around $0,20 per RBS for a few days.
Surprising after a big burn event it fell to as low as $0.14.
However since the 50% percent RBS burn one finds that the price is firming up.
Currently at the time of writing the price is at $0,24 per RBS token.
The $0,20 per RBS tokens has been a range where the RBS token has spent a lot of time and consolidated.
Hopefully it should act as a strong floor and support the price.
It is to be seen how the present trend continues and at what price we see more selling pressure coming to the RBS token
Till then Investors can invest by way of Staking in the Pool and the farm options present on https://robiniaswap.com/
There is more to Robiniaswap than just token burns.
More features are being worked on by the team and parameters on the staking pool and farm tweaked all the time to keep them attractive for the investors so the price may be influenced by a number of features and not just the burn event.
In case you want to know more about Robiniaswap here are the links which can be used to connect with the project or find more information.
Robinia Swap Audit Report.
Robinia Swap Official Document: https://blokfield.gitbook.io/robinia/
Discord Channel: https://discord.gg/JYNVSuWFF7
Global Telegram Channel: https://t.me/officialrobinia
Korea Telegram Channel: https://t.me/robiniakr
Kakao Talk 1:1 Inquiry: https://open.kakao.com/o/s9uEwEyb
Business Partnership: email@example.com
Standard Disclaimer: Please do your own due diligence and research before making an investment. The purpose of this post is for educational purpose only and it should not be considered as financial advice.