It is not unusual for blockchain and crypto-related firms to burn off a portion of their token supply. Token supply is regulated within the crypto market according to demand and supply and firms often burn off a portion of their supply to ensure that the tokens in the market do not exceed a certain number. This, in turn, ensures a healthier and more robust ecosystem.
The latest of these companies to announce a token burn is Crypterium, a prominent crypto bank. According to a July 1, 2021, announcement from the company, 30% of its current CRT token supply is to be burned.
Burning the Stash
CRT is the native token for the Crypterium ecosystem and is based on the Ethereum blockchain. Currently, a 30% token supply represents over 24 million CRTs which are to be removed from existence.
The reason for this is that a 0.5% fee is charged every time a transaction takes place using Crypterium services and this fee, denominated in CRT, is burned.
This means that the current decision to burn so many tokens will benefit the Crypterium ecosystem and its users. This is also in addition to the over 1.6 million tokens that the company has burned since 2018.
In 2020, 400,000 CRT tokens were burned by the company and this has only increased in 2021, with 800,000 tokens being burned in the first half of the year. A chart shared by the company shows that in 2019, the monthly token burning rate was around 10,000 CRT. By 2021, this figure has risen to 150,000. If the current trajectory continues, 2.3 million CRTs will be burned and in 2 years, the goal of removing 30% of the CRT token supply will have been reached.
Community Efforts Towards Growth
In the past, the burning of tokens was tied exclusively to transactions but now tokens will be redeemed and burned from the open market. There is the expectation that once these tokens are redeemed and burned, the market price of CRT will increase as a result. This effort, while primarily taking place through the actions of Crypterium management, can also be aided by the community.
Crypterium has invited members of the public who currently hold CRT to send their tokens to a specific address from which it will be burned up until the 10th of July, 2021. This will be beneficial for those who have idle tokens and those who simply want to help the ecosystem.
“Until now, our burning rate exclusively depended on transactions. However, looking ahead we’re planning to redeem tokens from the market for burning purposes. We are confident that increasing CRT burning speed will have a positive impact on our ecosystem,” said Austin Kimm, COO at Crypterium.
The incoming burning session is not the only development that has taken place with Crypterium in the last year. Its user base has crossed the 500,000 mark and in 2020, its monthly gross profit grew tenfold. Besides the goal of burning 30% of its token supply, Crypterium also plans to reach a €200,000,000 monthly cash flow by 2023.