Second Quarterly TKO Burn: Firing Up the Value of Toko Token
In the blink of an eye, it has been more than half a year since the record-breaking launch of Toko Token (TKO) on 7 April 2021 and about four months have passed since the first quarterly TKO Burn which ran from 26–30 July 2021 involving the burning of about 200,000 TKOs, which as calculated based on the trading price of TKO as of 30 July 2021 i.e. at USD1.53 per token, amounts to approximately USD300,000. As promised in TKO’s litepaper, every quarter Tokocrypto will utilize a portion of the trading volume generated on our crypto-to-crypto platform to burn TKO tokens, up to 10% of total TKO token supply and as we approach the end of October 2021, it’s time for the second quarterly TKO burn. When it comes to the token economics structure of TKO or any utility token for that matter, the maintenance of stable levels of inflation rates plays a central role in securing the sustainability of the token’s long term growth due to the perennial presence of cost-push and demand-pull factors which could result in sky high inflation rates if left unchecked.
The importance of token burning for maintaining the equilibrium of the ecosystems of utility tokens is illustrated by the fact that even the issuers of blue chip utility tokens such as Binance Coin (BNB) and Ether (ETH) have incorporated token burning features as part of their respective token economics structures. In this regard, it is notable that Binance had completed its latest (i.e. 16th) quarterly burn for BNB which involved the burning of 1,296,728 BNBs on 18 June 2021 whereas Ethereum have, since the implementation of its London Hard Fork update on 5 August 2021, started burning about USD50,000 worth of ETHs every hour whereby as of 20 October 2021, a total of more than 578,000+ ETHs valued at USD2.318+ billion have been burned.
It was in this context that TKO, as a top of the line utility token, have incorporated the TKO Burn feature as part of its token economics structure to serve as a control mechanism which neutralizes the effects of the pertinent cost-push and demand-pull factors in relation to the market dynamics of TKO thereby helping to maintain the stability of TKO’s inflation rates which in turn ensures that TKO holders can get more out of their TKOs. With TKO serving as the unifying thread weaving through Tokoscape, the role of TKO Burn in supporting the equilibrium of the token’s ecosystem is set to be ever-more critical particularly given TKO’s constantly growing list of functional use cases which include Binance Pay, Travala.com and TokoMall with more to come in the form T-Hub (which will be a ground-breaking crypto community center in the picturesque island of Bali in Indonesia) as well as TokoSwap (which together with Toko Incubator and Tokocrypto Sembrani Blockchain Accelerator (TSBA) would form part of Tokocrypto’s upcoming Toko Launchpad).
Token Burning: The Crypto Embodiment of Currency Demonetization
In many ways, token burning embodies the central tenet of currency demonetization in the world of fiat money which involves stripping a currency unit of its status as legal tender. Conceptually, token burning is analogical to currency demonetization in that the token burning process involves the removal of a parcel of the relevant token from market circulation before stripping the tokens of their utility value by sending them on a one-way ticket to a verifiably unspendable address i.e. an eater address that serves as a black hole which gobbles up these tokens in a way that renders their retrieval to be technically impossible. However unlike currency demonetization which usually involves the replacement of the old currency unit with a new one, there would be no replacement for tokens which are destroyed as part of a token burning process whereby this holds the key to the effectiveness of token burning as an inflation control mechanism.
In the context of the conventional financial system, the quantity theory of money posits that there is a positive correlation between the supply of money in an economy and the prevalent inflation rates as reflected in the price level of goods and services in the market. In other words, the quantity theory of money suggests that an increase in the supply of money in an economy would result in higher inflation rates in the market i.e. raise the price level of goods and services and vice versa. As cryptocurrencies, particularly utility tokens which can be exchanged for goods and services function in a manner which is not unlike conventional monetary instruments, albeit exclusively in the digital sphere, the quantity theory of money is theoretically applicable to cryptocurrencies such as utility tokens.
In the context of utility tokens such as TKO, the quantity theory of money effectively postulates that a reduction in the supply of a particular token would lower the inflation rates of the token which in turn results in one unit of the token being exchangeable for a higher quantity of the goods and services that can be traded for with the token. Accordingly, it can be surmised based on the application of the quantity theory of money that subsequent to the second quarterly TKO burn, TKO would be imbued with more purchasing power whereby consequentially, on a per token basis TKO can be used to acquire more goods and services associated with TKO’s functional use cases thereby giving TKO holders more bang for their buck.
Second Quarterly TKO Burn: The Lowdown
The details of the second quarterly TKO Burn are as follows:-
Stage 1:5 November 2021–32,250 TKOs
Stage 2:7 November 2021–70,500 TKOs
Stage 3:9 November 2021 - 105,750 TKOs
Stage 4–11 November 2021–141,000 TKOs
The burning of 349,500 TKOs, which as calculated based on the trading price of TKO of USD1.67 on 18 November 2021 amounts to approximately USD583,000+ is a sure-fire indication of the impressive growth rate in terms of the user base of Tokocrypto’s crypto-to-crypto platform as this amounts to 10% of the revenue generated from the trading volume of the platform during the relevant period.
Moving forward, Tokocrypto will be continuing with its quarterly TKO Burn to maintain the inflation levels of TKO as part of our policy of continuously striving to enhance the value of TKO so as to maximize the investment returns of TKO holders.
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