- The favorable reception following the announcement reflects optimism and confidence in the progress and future of the FLOKI project.
- Removing 2% of FLOKI from the market signals an attempt to enhance its scarcity and value, strengthening the security of the project.
The developers of Floki, the other dog-inspired memecoin, have decided to burn, i.e. permanently remove, 2% of all $FLOKI tokens in existence. This totals approximately 190.9 billion tokens, which is a lot, valued at over $11 million.
Burning tokens is like if in the real world you decide to take out a portion of the money in circulation and destroy it. This makes what’s left rarer and potentially more valuable because less is available.
It’s a way to try to make the price of Floki go up, because with fewer tokens, if people still want to buy them, the price could go up because supply has decreased while demand remains, as we’ve read in some cases on ETHNews.
The tokens they are going to burn come from a reserve they had stored on a service called Multichain. Multichain was a place that allowed them to move tokens from one blockchain to another, but it ran into serious trouble when someone hacked the platform and stole a lot of money.
Floki’s developers had already moved their tokens off of there before the platform collapsed, and now it has decided that the best way to make sure those tokens are never used is to destroy them.
After announcing this plan, Floki’s price rose 13% initially, which means that people look favorably on this decision and believe that it may be good for the value of the cryptocurrency.
So in a nutshell, Floki developers are taking a large amount of their tokens out of circulation to try to make the remaining tokens more valuable, also responding to security issues and showing that they are taking steps to protect and improve the value of Floki.
