¡The value of burning tokens! ...it's my MeMe #282
@por500bolos
Posted 3h ago · 3 min read
In this highly illustrative post today, we will try to offer one of the many possible explanations of how the token burning mechanism works on the Hive blockchain and the reasons for doing so.
@buildawhale/posts" target="_blank" rel="noopener noreferrer">¡Burn baby Burn!
@por500bolos/is-there-actually-a-hive-anomaly-it-s-my-meme-280" target="_blank" rel="noopener noreferrer">Posts with rewards set to burn still pay @por500bolos/hive-s-burn-posts-it-s-my-meme-47" target="_blank" rel="noopener noreferrer">curators.
Only author rewards are burned.
If you think this type of content should be eligible for @por500bolos/and-this-is-it-it-s-my-meme-78" target="_blank" rel="noopener noreferrer">author rewards, then «click» here.
Thanks for your @por500bolos/tip" target="_blank" rel="noopener noreferrer">support.
Over the years on Hive, I bet you've wondered a lot about the eerie workings of the Hive blockchain and many of the strange things that happen behind the scenes. Like, for example...
Why, in just ten years since the creation of this blockchain in the Steemit era, have @por500bolos/from-thousands-dollars-per-post-to-barely-few-cents-today-it-s-my-meme-216" target="_blank" rel="noopener noreferrer">author rewards been reduced and declined so much today?
Why, did the Hive blockchain and its tokens went from once being in the third position in the cryptocurrency markets to around the 634th position today and for some time now?
Why, the Hive token went from having a price/value of 3.414030 USD on Nov 25, 2021 to 0.055348 USD on Mar 30, 2026 and oscillating around $0.06149 USD today?
Why, has participation, comments, interaction, the engagement and user's transactions on the Hive blockchain declined so much in recent years and why have they decreased exponentially?
Why, do some high-HP holders burn so many Hive tokens instead of using them more productively, like for instance, upvoting to content creators of genuine quality and originality?
And it is precisely on this incendiary reality in what I will focus on my post today to try to explain the possible reasons of why these opulent individuals with high HP burn daily so many Hive instead of using them in a less selfish and more productive way. Pay attention, please!
The true value of...
Burning a large portion of a blockchain's tokens permanently removes them from circulation, reducing total supply to create scarcity. While this deflationary action often aims to increase the value of remaining tokens, a massive burn does not guarantee a price surge. The effect depends heavily on market demand; without adoption, it can create a rare but worthless asset.
Immediate Consequences of Massive Token Burns:
Reduced Supply/Scarcity: The primary effect is a smaller circulating supply, making the asset 'theoretically' scarcer.
Potential Price Appreciation: According to demand-and-supply mechanics, a reduced supply with 'constant or increasing demand' typically boosts the price of the remaining tokens.
Market Cap Stability: Burning coins does not instantly increase market capitalization; it usually results in each remaining token becoming worth more.
Reduced Liquidity: Drastically reducing the supply can lead to lower liquidity, causing higher volatility and higher potential price swings.
Investor Confidence/Fear: It may be viewed as a positive move for long-term scarcity or a desperate act by a failing project.
Common Reasons for Such Actions:
Deflationary Mechanism: Fighting inflation and maintaining supply discipline.
Unused Asset Removal: Many projects burn huge portions of the supply that was never sold or circulated.
Increasing Value: An attempt to boost the price of the remaining circulating tokens.
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