Merit Circle has decided to accelerate its token burn process by burning 200 million of its native MC tokens, with a total value of $147 million. The project aims to burn 200 million MC tokens (i.e. 20% of the initial MC supply).
Since MIP 7, the company has burned 6.125 million MC tokens every month. Destroying tokens greatly reduces MC’s supply; which must have the effect of increasing the price of the tokens.
Thus, one-third of the billion tokens in Merit Circle’s global supply are reserved for the rewards community wallet. These tokens have so far been routinely destroyed.
Currently, token holders hold 66% of the total supply. This figure would increase to 80% if the 330 million tokens in the community reward wallet were destroyed. According to the plan presented on October 26, 2022 by Merit Circle, since most crypto exchanges only cost assets with a supply of less than 100 million, the destruction of all tokens will facilitate the listing of Merit Circle on these platforms. .
However, not everyone is in favor of quickly destroying all the remaining tokens. Some members of the community claim that this is incompatible with the philosophy of cryptocurrencies, which emphasizes moderate and steady development.
Additionally, these recalcitrant members claim that destroying all tokens at once is unnecessary and could harm Merit Circle’s IPO prospects. Merit Circle’s current market capitalization is valued at $177,000,000 based on an outstanding supply of 294,000,000 MC. The fully diluted value is estimated at $525,000,000 based on a total supply of 871,000,000 MC.
It’s still unclear if Merit Circle really gains from this by rapidly destroying its remaining tokens. Indeed, token prices do not necessarily increase during a burn. Moreover, the burn of tokens, especially when it is accelerated, can be considered purely speculative and contrary to the spirit of crypto-currencies which is intended to be open to all.
Read also : Is Reddit better than Opensea for NFT trading ?
Get real time update about this post categories directly on your device, subscribe now.