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RE: Is Token Burn Bad?

in #cn7 years ago

Token burn seems to be the best solution for investors.
I and many others have a question that apparently hasn’t been answered, going beyond ICOs.
If the crypto market starts going up substantially, a large number of Tether will be traded for other cryptos. That will leave excess Tether that has to go somewhere in order to maintain parity?
Do you think they will be burned or that will be the end of Tether?

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I think Tether is crucial for the exchanges to sustain money within the crypto market. It's unlikely they will burn it, and instead, they will themselves use it as a reserve.

There's 2 things that can happen when the market enters a bear trend:

  • Traders and investors exit the market completely. They sell crypto for fiat, and this may lead to some loss of capital in this market permanently. Exchanges do not want that to happen since they have nothing to do with the way this market runs; they simply need volume to profit.

  • Traders sell their crypto for Tether, and when they feel the market is improving, they buy back in to crypto they like. Remember, trading in and out of Tether only benefits the exchanges. Tether is a great way for exchanges to make money so they are going to utilize capital reserves to sustain Tether.

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