How a Disciplined Token Burn and Buyback Model Can Underpin Long‑Term Token Value
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The post How a Disciplined Token Burn and Buyback Model Can Underpin Long‑Term Token Value appeared first on Coinpedia Fintech News 1. What is token burn and why it matters Token burning refers to the deliberate removal of tokens from circulation, typically by sending them to an irretrievable address. In crypto ecosystems, this mechanism is often used to limit supply and introduce deflationary pressure in a verifiable and transparent manner. One commonly cited case is BNB (Binance Coin), where Binance conducts regular burns tied to revenue generated from trading activity. These events aim to reduce circulating supply over time, aligning the token’s availability with the platform’s usage. Ethereum, following the EIP‑1559 upgrade, introduced a different model. A portion of each transaction’s base fee is burned automatically on-chain. This embeds deflationary dynamics into the protocol itself, making it directly responsive to network usage, rather than relying on discretionary decisions. MultiBank Group has structured a similar mechanism into its $MBG Utility Token. At launch, the company committed to burning $440 million worth of $MBG over four years. According to official press releases, this includes approximately 10.5% of the total supply in the first year, with the cumulative amount reaching 25.5% by year four. These burns will be funded from trading fees and revenues generated across MultiBank’s multi-product ecosystem, ie derivatives trading, tokenized real estate, staking, and exchange services. This structured reduction in supply is designed to reinforce the token’s economic model by linking scarcity to usage growth. 2. What is token buyback and how it supports value Token buybacks occur when a project repurchases its tokens from the open market, often using revenue reserves or treasury funds. The goal may be to remove excess supply, strengthen market confidence, or support the token’s perceived value. Although less common than burns, buybacks are used…
Filed under: News - @ August 1, 2025 12:28 pm