$ADA: Charles Hoskinson Explains Why Cardano Does Not Do Token Burns
Cardano’s creator Charles Hoskinson has on social media addressed the potential for $ADA tokens to be burned in response to suggestions from cryptocurrency community members who defended that burning tokens could make remaining tokens more valuable.
In a tweet addressing one such suggestion, Hoskinson noted that there is “no magic reserve of Ada floating out there” and that all circulating ADA “is in the hands of owners, actual people” which means that to burn these tokens “it would require it to be taken from them and destroyed.”
When asked about how other cryptocurrency communities burn tokens, Hoskinson clarified that these usually have “some large premine that the founders control” and then use to “manipulate the price during periods of lower liquidity” by destroying their stash.
Hoskinson added that Cardano “does not have this.” Responding to another user who noted that coins being issued for users who are staking their ADA tokens could be partly burned to help remove some of its circulating supply, Hoskinson said that such a move “would be stealing the Ada holders and SPOs” as they “earn those rewards.”
It’s worth noting that while Hoskinson does not support implementing a protocol-based ADA burning feature, users are at any time able to send their tokens to addresses that no one controls to effectively burn them, as they would be removed from circulating.
Several cryptocurrency projects burn tokens as a way to reduce circulating supply to make the remaining tokens more valuable. Binance’s BNB, for example, counts on a burning mechanism to remove tokens from circulating until there are 100 million BNB in users’ hands.
The community of meme-inspired cryptocurrency Shiba Inu ($SHIB), as reported, has supported token burns for some time, at one point burning 2.4 billion SHIB in a single week as its holder numbers kept on growing.
Cardano has recently been listed on the popular commission-free trading platform Robinhood, which allows users to buy a number of financial assets including equities, options contracts, and cryptocurrencies.
Robinhood’s listing announcement on social media implies Cardano was added to the platform in response to customer demand. Robinhood’s listing notably means that Cardano is now available to the platform’s 13.2 million monthly active users, which could boost its liquidity.
Featured image via Unsplash
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