A couple of weeks back, we have redefined the objectives for the CTPSB token and the aim is very clear: increase the token value and the APR of CTPSB.
Most of the time, the project was burning about 0.7 CTPSB tokens per week. This was a small contribution to pushing the token value up. We decided to increase this rate and from now on, we will burn 2 CTPSB token per week (=~ 7 Hive) until we don't have the funds to do so anymore. This will give a slight push to the token on a regular basis and help the APR to climb. It's a small effect that accumulates its effect over time.
The effect of burning tokens
Since the token burns have no direct influence on the hive power of the account, mathematically speaking, each burn has a direct effect on the token value.
Let's say we have 2000 tokens in circulation and 10'000 HP backing it (this are not the correct numbers it's just for demonstration purposes). The token value would be 10'000 / 2000 = 5. Now let's say we burn two tokens. Now we still have 10'000 HP but only 1998 tokens. The token value would now be the following: 10'000 / 1998 = 5.005. This means that this small burn gave an extra value to all the other tokens. It's the same process with CTPSB simply with other numbers. The effect is a bit smaller because there are more tokens in circulation.
Doing these burns on a regular weekly basis is actually cumulating the effect. Also what is important to understand is that the return of the HP remains the same, so the increase of Hive power is also getting bigger per token when there are less tokens in circulation.
The numbers of this week
| Assets | Amount | Increase over last week |
|---|---|---|
| Hive Power | 32972 | +88 |
| Tokens in circulation | 9448.4 | -2 |
| Burnt tokens | 2050 | +2 |
| Token value | 3.49 | +0.01 |
| APR | 13.5% | +0% |
Learn more about the CTP Swarm Booster:
A project run by @liotes
