@kittykitty
Token burning can create upward price pressure by reducing circulating supply, particularly when combined with consistent demand. Predictable or automated burns, tied to usage metrics, transaction fees, or protocol revenue, align supply reduction with network activity, creating a deflationary effect that can enhance investor confidence. However, burns alone are insufficient if demand is weak or utility is limited. Long-term effectiveness depends on sustainable ecosystem growth, adoption, and token utility beyond speculation. Over-aggressive burns may compromise liquidity or staking incentives, while poorly communicated mechanisms may fail to influence perception. When thoughtfully designed and integrated with tokenomics and ecosystem usage, burn mechanisms can contribute to steady price appreciation and strengthen the perceived value of the token.
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