A decentralized autonomous organization (DAO), Merit Circle, decided to burn all tokens resting in the Community Incentives wallet in order to decrease the total supply and thereby increase its value. This operation had been burning tokens once a month, but now it favors mass destruction.
200 million MC tokens altogether worth around 150 million, will be removed from circulation as a result of the burn. There was a resounding majority of votes in favor of burning this enormous amount of MC tokens. Only three people opposed the idea out of 232 votes, with 99.7% in favor.
The present proposal that is up for voting stated:
“Burning these [currently purposeless] tokens will significantly reduce the total supply of Merit Circle and will bring the fully diluted valuation more in line with the circulating market capitalization. Likewise it will remove any doubt from outsiders about upcoming token unlocks”.
Merit Circle tokenomics data bloating due to access tokens
The Community Incentives wallet by Merit Circle was created with 294 million tokens, or approximately 30% of the one billion MC supply overall. These resources were meant to serve as community rewards. Since the allocation, the tokens have been lying inactive in the Community Incentives wallet without being utilized.
Over the past nine months, 6,125,000 MC tokens have been burning from the wallet, leaving around 200 million coins. According to an earlier proposal, “keeping these tokens negatively bloats our tokenomics data and serves no beneficial purpose.”
Merit Circle is a DAO giant that distributes and helps in managing the money that users utilize in online games.
Players, commonly from emerging economies, borrow non-fungible tokens (NFTs), that serve as the game’s entrance fee. The player is required to pay back a portion of his game earnings in exchange. This decision of burning tokens by the companies is not new as similar actions are already taken by Ethfinex by burning $20 million worth token and by Tyler and Cameron Winklevoss owned crypto exchange Gemini in past years.