There are many different ways to bring value to native cryptocurrencies today. Some projects focus on marketing, whereas others have a fixed supply or initiate token burns. Crypterium intends to burn 30% of the total CRPY supply, marking a significant milestone for the crypto bank.
Token Burns Remain a Viable Option
One of the most heard comments regarding some cryptocurrencies is how their supply is “too big” to amount to anything. While there are projects with hundreds of billions of tokens – and more, there is usually some mechanism in play to slowly reduce the supply. one option of doing so is through token burns, indicating the developers send a share of the total supply to an unspendable address.
Crypterium opts for a similar approach, although in a more controlled manner. The team has been burning tokens since 2019, with more tokens being removed from circulation every year. By 2020, the team has burned over $500,000 in tokens, and they aim to increase their game significantly. The current plan is to burn more tokens than last year. Numbers for this year indicate the plan goes swimmingly, as 800,000 additional tokens have been burnt in the first six months of 2021.
Considering how this project started with a monthly burn of 10,000 CRPT, the project has evolved significantly. The slow and steady rate at which these tokens burns were scheduled to increase will be replaced by a more aggressive action plan. That plan has been formed up until 2023. Burning more tokens will benefit CRPT token holders, as a reduction in total supply means they hold a bigger portion of what is left.
To date, Crypterium has linked the burn rate to the platform’s transaction volume. As a crypto bank, the services provided by this project can prove essential to millions of people. However, the founders acknowledge that now is a good time to step up the redeeming and burning process of tokens from the open market. There are still 83 million CRPT in circulation, of which 18 million are locked in deposit accounts. Bringing down the overall supply will become more outspoken when the burn rate increases.
Will It Affect The CRPT Price?
It makes sense for the actions by Crypterium’s team to affect the CRPT token price on paper. Reducing the total supply will make the asset more scarce over time, appealing to investors and speculators. However, the success may hinge on whether the ecosystem sees an increase in transactions. Assuming that is the case, the traditional forces of supply and demand can move the CRPT direction in an upward direction. That is, in theory, as cryptocurrency markets remain volatile and unpredictable first and foremost.
Crypterium COO Austin Kimm adds:
“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 CRPT burning speed will have a positive impact on our ecosystem.”
Behind the scenes, Crypterium notes a strong increase in users. The crypto bank’s services – including its crypto-to-fiat payment card – are now used in over 170 countries. Following the user growth is a monthly gross profit increase by factor 10 for the year 2020. If this growth rate keeps up, the team can hit its 20 million Euro monthly cash flow in the coming years.
It is worth noting users can burn their own CRPT tokens if they want to. A dedicated address has been created to facilitate community-based token burns to reduce the supply further. This option is available until July 10, 2021, after which user-driven burns will no longer be possible.