One of the biggest goals of the cryptocurrency industry has always been to protect its users from a major issue of traditional finance. That problem is inflation.
People from all over the world have been struggling with inflation at one point or another, having their local currencies devalued, which caused many to lose entire fortunes, while others have been struggling to survive. The crypto industry tackled the issue in two ways. The first one is having a small total supply, that is then expected to be released gradually, over time. This is the approach of Bitcoin, and it inspires trust and reassurance that the coin’s value will only go up as more people join it, and demand exceeds supply.
BTC has 21 million units total, and that’s the largest amount of BTC that can ever exist. However, not all coins have been released as of yet. Instead, they are being mined, with each block releasing a small portion into the circulation.
The other way is to have a massive total supply, and then conduct token buybacks and burning events, so that this supply would diminish. Meanwhile, such events are making the remaining coins scarcer, and also more valuable, so this second approach is essentially the backwards inflation. This is also a method that a new project called Myōbu is using, although in a slightly different, unique way.
How do Myōbu Token Burns Work
Myōbu recently announced that it will start conducting token buyback and burning events, and the first one has just been completed over this past weekend, on July 4th. The project introduced a powerful smart contract that will continue to raise the price floor by reducing the number of tokens in circulation, reduce gas costs, and more. This new contract is popularly called The Shrine, due to the project’s philosophy and approach.
At this point, it should be noted that Myōbu is a project that got its name from celestial foxes tied to the Japanese god of harvest. These celestial foxes are connected to fun, entertainment, generosity, blessings, and alike. All in all, the project has a lighthearted approach to crypto, which doesn’t mean that it is not serious about them.
On the contrary, Myōbu may have solved another major issue in the crypto industry — price manipulation. As for its The Shrine contract, it was created to allow burning events, and it was necessary due to Myōbu’s unique architecture. Since the token cannot be transferred between wallets, it was not possible to burn the already purchased Myōbu tokens. Instead, the project figured out a way to do it via The Shrine contract, Uniswap, and ETH.
Essentially, the contract was designed to receive ETH offerings, hence the name “The Shrine.” Once it receives a certain amount of ETH, it calls the Uniswap router to swap its balance for Myōbu, and the received tokens are sent to the burn address.
In other words, the tokens are purchased on the open market and simply sent to the burn address directly. Meanwhile, the contract can be called by anyone, and anyone can call the buyback function. This is the project’s way of achieving trustlessness, transparency, and fairness.
The community is further encouraged to do so because whoever calls the buyback function will receive a percentage of the contract’s balance. So, by doing it, one can earn Ether, as well as permanently reduce the MYOBU supply, meaning that they would increase the token’s price by a bit, forever.
Myōbu’s report published on Twitter says that around 1.64B tokens have been burned, and this will certainly increase the price floor. More than 20B tokens have been bought back and/or burned since the launch of the token and shows the deflationary aspect of the ecosystem. The project also said that there are further plans for token burns, which means that the price should, in theory, continue to rise. For this first time, however, the project also created a contest for anyone who burns 0.05 ETH or more. Those users will become participants in a random drawing for the reward of 0.5 ETH. The project has already randomly selected the winner, and the funds have been sent to the wallet of the winner.