Demand and supply are one of the fundamentals of the business sector. The more the supply of a product, the less would be its demand and so its price. However, when the supply decreases, the demand and price of that product increase. The same phenomenon is applicable in the crypto market as well. Many platforms burn their coins to increase their prices.
Burning the tokens is a phenomenon in which the circulation supply of the coins is reduced by sending some of the tokens to addresses known as burners or eaters. By reducing the circulation supply, the price of the coin increases. Almost all cryptocurrencies do this to increase the value of their coins.
Following is the comparison of BNB, FTT, and SHIB coins.
BNB
BNB is one of the top cryptocurrencies in the world. When it was launched in 2017, it had a circulation supply of 200 million BNB. However, from the start, they had a plan to reduce it by 50% through the process of burning.
mechanism of BNB
There are two ways to BNB reduction of circulation supply
Quarterly
It was part of the initial plan in which the BNB token give away after three months. The Binance smart chain would pay the price of these tokens. The burning is based on trading volume and the fees Binance generated.
BNB Chain
It is the process in which BNB tokens will automatically reduce with the help of the gas fees collected by validators from each block. This mechanism was first introduced in November 2021 and has removed more than 106,000 BNB till July 2022. It means the more the BNB is used, the more will be the reduction.
FTT
The total circulation supply of FTT tokens is 350 million, which is planned to reduce by half through the FTT burn. The platform has decided to give 33% of the trading revenue to burn FTT. It is different from both BNB and SHIB in the mechanism.
The platform gives away tokens every Monday. The process is shown live and lasts for two hours. due to this, the FTT token is now considered one of the top cryptocurrencies in the world. The burning mechanism is so unique that it might surpass BNB in its target of reducing the supply to 50%.
SHIB
SHIB is one of those top cryptocurrencies which has reduced its tokens more than anyone else. On 26 September 2022, its burning percentage reached a record 1046%. More than 129 million SHIBs were removed from circulation last day, and about 318 million SHIBs have been sent to eater addresses.
However, it does not affect the overall volume and price of the SHIB because it has a multi-trillion circulation supply. Many investors believe that the speed with which SHIB burns its token is too slow. Nonetheless, there has been a recorded increase in SHIB burn from last year in July. That is a bit of enthusiastic news for the investors.
Takeaway
Although all three coins have their mechanism of reducing the token, BNB is more systematic in its approach, while SHIB is a bit slower. However, it has increased its rate since last July. FTT is fast and more systematic. Every Monday, they burn their tokens. So as not to be over-enthusiastic, FTT will achieve its goal of reducing the supply to 50%.
Conclusion
One of the reasons for Bitcoin’s high price is its lower circular supply of coins, and you can reduce the supply through burning. it is one of the crucial phenomena for a coin to increase its worth. If a platform has a better mechanism, it will lead the future, and if it does not have a proper system, then the rest will lead.
Source: https://www.cryptopolitan.com/bnb-ftt-and-shiba-burn/