Hello everyone, this week, we are discussing about one of the methods used in crypto industry to keep prices stable or increase it's value over time: this method is known as Token BURN, often known as burning of tokens. The brainwork behind this method is strongly related to the Supply/Demand theory, which states that prices tend to decrease when there is an abundant supply of an asset, on the other hand when there is less supply of an asset there will be an increase of value of the said asset.

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Use your own words to determine what is token burn? and explain how it works (if possible add an illustration for it)?

Token burning entails permanently erasing from existence a portion of the entire quantity of a certain token that is currently in circulation, or in other words, it entails lowering the Supply.

The burning of tokens can occur in a variety of ways, as I must also emphasize. For example, it can be generated as a result of an economic policy, as in Steemit, where @null is the recipient of the burning, or it can be automated, as in the case of BNB, Binance's cryptocurrency, which burns a certain amount of this token every three months based on an algorithm that takes place on the Blockchain per blocks.

List the benefits of token burning with a detailed explanation

The main advantage is the reduction in the number of tokens in circulation, or a reduction in their supply, which can lead to an increase in price, price increases because the token is now scarce or the rate of supply is now limited.

As a result of token burn, the demand for an asset rises by preventing their commercialization.

Limit inflation rate of token through burn system: Most cryptocurrency project has a kind of token generation process which result to a constant increase in the token supply adding to the already existing supply. A deflation system or rule has been established by many cryptocurrency project which is burning tokens which is very advantageous for the project itself.

Burning of token encourages investors to hold assets For long-term, as it can be quite advantageous because they can watch as the value of their wallet rises as the number of tokens in circulation falls.

Why does the blockchain burn its tokens? Study the case of a blockchain that burned its tokens by identifying the results obtained.

Burning of steem is a novel method used by blockchain organizations to reduce the amount of steem currency in circulation.

Some reputable blockchains, for example Binance and Etherium, burn their tokens in order to keep the rate of supply/demand in their favor. This has helped the token's to increase value and price over time.

The burnsteem25 company that encourages burning 25% of your publishing revenue? Do you think it will help boost the value of steem currency in the medium term?

A company called Burnsteem25 was put up to get authors to designate At least 25% beneficiary of their reward to @null. This account is a dormant account @null. Nobody owns it, so anybody who sends steem token to @null is in a sense removing steem token from circulation thereby reducing it's supply.

By means of this contest I have come to learn more about the steem token that it has an unlimited maximum supply of its token in the market, this act of rescuing the loss of token value might not be sustainable with this unlimited supply. Therefore, burnsteem25 may not really have a Long-term effects on the value of steem since there is more steem supply in circulation, which obviously opposes the burnsteem25 goal.

Conclusion

Tokens burn is a process adopted in the cryptocurrency industry to reduce the number of tokens in circulation by sending the token to a null address, this is essential in other for the project to grow in price/value and limit the total number of supply in circulation.