Token burning is a process by which a company destroys a certain number of tokens, usually to create scarcity and support the price. While it may seem counterintuitive to destroy something of value, token burning can be a boon to the company and its investors.
Token burning is a well-established practice in the crypto industry, and while lots of crypto projects use it, Uniglo (GLO) takes the task to the next level by offering more intense, in-built burn mechanics.
The crypto community has high hopes for GLO, which might even be a role model for already established digital currencies like Ethereum (ETH) and Solana (SOL).
Idea Of Uniglo (GLO)
Uniglo (GLO) is a kind of social currency designed to rise in value slowly, and is the first community-owned treasury backed by several assets. The Uniglo Vault contains digitized gold, NFTs, digital currencies, and collectibles and is funded with a 5% buy-and-sell tax.
To assure the scarcity of its token, GLO, Uniglo also uses a ground-breaking burning process that follows a hyper-deflationary model. The coin’s value is intended to be driven by this deflationary emphasis independent of the external circumstances.
Ethereum (ETH) And Solana (SOL) Overview
Similar to how Bitcoin (BTC) transformed the way we think about currency, Vitalik Buterin’s creation, Ethereum (ETH), has revolutionized apps and services. Ethereum gives people more control over the services they use by doing away with middlemen and substituting programmable, automated smart contracts in their place.
Much of the functionality utilized in the crypto realm today was created with the introduction of smart contracts. Without the tools offered by Ethereum, neither decentralized applications (DApps), non-fungible tokens (NFTs), nor decentralized financing (DeFi) would be feasible. Most cryptocurrency projects are partially or entirely based on Ethereum’s basic technology, and many began as ERC-20-compliant tokens before switching to their mainnets.
Solana (SOL), a cryptocurrency developed by a group of Qualcomm veterans, has established itself as a remedy for Ethereum’s most pressing problems, including lengthy transaction times, excessive gas costs, and limited scalability. A huge improvement over Ethereum, which can only handle around 15 TPS, the Solana network claims it can handle up to 65,000 TPS in a single global state.
The quantity of Solana in circulation rises over time since it is an inflationary asset. Contrarily, the recent London hard fork has changed Ethereum into a deflationary asset by implementing a burn mechanism for each ETH transaction, resulting in a gradual decline in the quantity of Ethereum in circulation.
Why Would Ethereum (ETH) And Solana (SOL) Adapt Their Tokenomics?
The problem with Ethereum and Solana is that frequently their value is driven by external circumstances such as moves in the stock market or Bitcoin. Uniglo (GLO), on the other hand, is designed with a deflationary policy at its core to help it appreciate over time as the amount of it in existence decreases.
The Ultra Burn Mechanism of Uniglo (GLO) is a first-of-its-kind deflationary system that burns 2% tokens from each purchase or sale. Furthermore, it utilizes the money gained from selling items in the Uniglo Vault to buy back and burn even more of the token. This creates a virtuous circle in which the price of Uniglo consistently rises over time as the amount of it in existence decreases.
These world-first features make Uniglo (GLO) an exciting project to watch and one that could force Ethereum (ETH) and Solana (SOL) to adapt their tokenomics to stay competitive.
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