What are Deflationary Tokens?
The deflationary tokens are the tokens fashioned to deduct in supply over time. As the circulating supply of the token deducts by the year passing.
The motive behind this is to secure the market from being flooded with the token by increasing the value of the token.
The best example is the coin that deducts its supply by 2% every year.
Let's suppose if there were 20,000 coins in supply in 2019, and by 2020 it will be 18,600 coins, 18,228 coins by 2020, 17,863.44 by 2021, and so on.
As far as the coin becomes more limited in supply, its demands will increase and so does its value.
Crypto projects of the deflationary token model obtain their achievement in various, however, the 2 major processes to burn coins from the market are :
Buy - Back and Burn
It is where the organization in charge of the project purchase back the best section of its coins from the market and burns them.
Those coins can be burned by sending them to a dead address where it lowers the circulating supply by destructing tokens.
This caused an emergence in the value of the coin due to demand remaining stable ( or increased) since the supply has been deducted.
The top tokens are been practicing these methods are FIT, BNB and CAKE.
Burn on Transaction
Into this, the commitment of the coin indicates that a percentage of the tax stored from on-chain transactions will let burn.
In another way, this on-chain transaction includes the coin attracting a tax and a percentage of the tax collected is burned.
It happened automatically due to the integration into the coin’s contract.
And it's success relies on the trading volume of the coin and the reason is elimination will only make when transactions happen.
Therefore, as much as the trading volume increase, more tokens are removed from the total supply.
Hence, token holders to driving value as tokens are seamlessly deducted from circulation while demands remain stable ( and possibly increase).
Whereas there are some tokens that have been utilized in this process are SAFEMOON and THUGS.
6 top deflationary tokens you should know about
Here is the list of some popular deflationary tokens are -
1. panKUKU: It is termed as a hyper-deflationary rewards token that works on the Binance smart chain BEP20. The interesting part is that the idea has been taken by the popular PancakeSwap. It will soon expand into a much more extensive project and product offerings than any other decentralized exchange (DEX) in the market. Its ecosystem involves KUKU token, KUKU Swap, IDO, Farm, Pool, Lottery, and NFT Marketplace.
2. Bitcoin (BTC) - This is the very first coin on the deflationary tokens as it is complicated as people believe that bitcoin is both inflationary and deflationary.
In inflationary shows the more coins are included in the supply through its mining procedure whereas in deflationary, its miner's rewards are halved every 4 years.
3. Binance Coin (BNB) - This BNB is the mother token of the Binance Network is also termed a deflationary token. It goes through Buy - Back and Burns technique. After every 6 months from the year, the team at Binance burns a fraction of the BNB coin.
4. PancakeSwap ( CAKE) - When it comes to the PancakeSwap ecosystem, CAKE is termed as the native token. While it does not have most of the supply which results in it being inflationary, however, then it employs a Coin Burn mechanism to put its supply in check.
5. Ripple (XRP) - XRP is yet another famous coin that charges fewer fees to conduct transactions. These fees are not returned to a central authority nor paid as a reward to the validators, instead, they are burned, hence creating XRP a deflationary token.
6. Crypto.com (CRO) - CRO - Here CRO, is the mother token of Crypto.com, a prominent cryptocurrency exchange. Before the launch of its main net in March 2021, Crypto.com burned 70 billion CRO ( roughly $10 billion).
There are many reasons that we kept panKUKU on top of this list, the first major reason is that it is affordable and it has platforms to generate good ROI for the holders and traders while keeping the extra fees low. Check the website and other details and invest in KUKU as soon as possible, because soon its price will go sky-high.