I dont quite get the concept of burning tokens on repayment of a loan as is done in Augmint tokens. I know this is done by banks in a centralised ecosystem as well. But what does burning actually mean? Is it like a devaluing of the currency/token?
enlighten my mind please…
When we “burn” tokens, it usually means that a company or person will send the tokens to an unrecoverable address.
By doing this, we would essentially decrease the total supply of that particular token, increasing its value.
Ah ok, so kind of like inflation control i guess. Yet another reason to do away with banks, however dont think we will ever do away with banks completely.
Maybe. But we should always have a choice to be our own bank.
Theoretically, if token burn is constant and supply is finite, wouldn’t it burn all tokens eventually? I’m trying to figure this out.