Why burn Steem Tribe Tokens?

Why would a Steem Tribe burn its tokens? The simple answer is to combat inflation. Anti inflationary measures are commonly used to reduce the supply of money or in this case, a Steem Tribe token.

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Even though it seems counter-intuitive to reduce the supply of something valuable, it makes perfect sense if the reduction of the total units creates a more significant gain by increasing the value of each remaining unit.

That was a mouth full. Let's explain it this way. Burning a token decreases the overall supply of that token. The first goal is for supply and demand levels to reach equilibrium, but the long term goal is for demand to exceed supply. When that happens, the price increases. Simple economics.

@battlegames has been burning its tribe token (#BATTLE) regularly. This week 1,076 #BATTLE were burned, and a total of 87,239 have been burned since the beginning of its burn campaign (source)

Why? To reduce the supply total in order to increase the price of #BATTLE.

Since no one owns @null, it acts like a black hole where tokens are sent to die. Sounds tragic, but the burn process can have positive benefits.

– Do you know of any tribes that are burning their token?
– Have you ever burned a token by sending it to @null?

I want to hear from you. Let’s keep the conversation going in the comment section.

Thanks for stopping by!
@SumatraNate

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Originally posted on my blog SteemPress : https://steemtribes.online/2019/10/04/why-burn-steem-tribe-tokens/

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