5

What's the deal with this "burn on deployment"? almost every deflationary token is bragging about the number of tokens they've burned before providing liquidity and isn't this useless?

For example, Alice buys the X token, then sends it to the burn address.

X price was raised because Alice bought the token, not because of her sending it to a dead address, it happened to avoid these tokens coming back to circulation.

In the same way, if there is no liquidity provided, so there is no trading happening, if Alice (X token deployer) just sends a certain amount of tokens to the dead address, this won't affect absolutely anything, because simply there is nothing to be affected apart from total supply.

So there is no difference between deploying then burning and just deploying without the amount that should have been burned.

Correct me if I'm wrong.

Improve this question

2 Answers 2

Reset to default
10

I believe you're searching for logic in a place where it does not exist. Burning tokens before token "launch" is actually a shitcoin trend which makes zero sense and in general something doesn't have to make sense if everyone does it. Burning tokens which are not backed up by any kind of liquidity is useless. Shitcoins cannot offer much in the way of project functionality, development or roadmap, simply because the majority of them are made by:

  • people who do not have the needed knowledge to bring greater scalability to the project
  • people who are starting the project as a joke
  • or people who are starting the project in order to scam

So what I'm trying to say is they're basically looking for any type of announcement to make the project to look like it's alive for the investors. Also don't forget that shitcoins are copy cats, they're strictly following and copying one another - same websites with different logos, colors etc, same nonce coin burn before "launching" and the very same smart contract code. I did some research lately and from 30 shitcoins about 20-25 used the exact same smart contract just different contract names. I cannot wait for this shitcoin era to end, because too many new investors are losing money in this speculative trading of nonsense tokens.

Improve this answer
5
  • Who is gaining money? And how do you become one of those people?
    – user253751
    Jul 5, 2021 at 10:38
  • That's not the place for such topics, this is a technical forum.
    – Miroslav Nedelchev
    Jul 5, 2021 at 11:35
  • "retarded" is maybe a bit too harsh.
    – Hatted Rooster
    Jul 5, 2021 at 12:10
  • No that's the right word, because too many people are loosing their money in this. Up to 70-80% of all shitcoins are scams and you can imagine how bad this is for the crypto adoption.
    – Miroslav Nedelchev
    Jul 5, 2021 at 15:28
  • @MiroslavNedelchev welcome to the unregulated free market which is the entire purpose of cryptocurrency to begin with, I guess.
    – user253751
    Jul 5, 2021 at 15:55
7

It's an effective form of marketing. From a mathematical point of view burning tokens on deployment is the same as never creating those tokens at all, but from a marketing perspective:

  • It creates the headline of "We burned x% of tokens" with the implied, but not actually true implication: smaller supply -> higher price

  • It makes the "premine" that the founders keep look smaller. If I deploy 1000 tokens, burn 990 of them, keep 3 of them, and distribute the rest I can claim that the founders share is only 0.3%, while actually it is 30%.

Improve this answer

Your Answer

By clicking “Post Your Answer”, you agree to our terms of service, privacy policy and cookie policy

Not the answer you're looking for? Browse other questions tagged or ask your own question.