Intro
Coin burning is triggered by a number of different actions within the AXIA Ecosystem and serves to continually create more and more scarcity of the AXIA Coin. Simple supply and demand economics tell us that as something becomes more rare, its value and worth will also increase so long as it provides utility. And, the more utility it provides, the greater enhancement of value and worth over time. While some other crypto projects employ a coin burning mechanism, these projects typically have an unlimited supply or limited to no utility, so therefore these coin burning systems do not create scarcity of these currencies or provide any underlying fundamental value to their holders. That is the magic of the hyper-deflationary tokenomic model of AXIA in which the total supply will never increase, only decrease — a process that will only build in velocity as more products, platforms, applications and utility are added to the ecosystem over time.
The process of coin burning not only protects value but can enhance it over time. There will always be less AXIA Coin available tomorrow than there is today. As more participants join the ecosystem, all supporters and holders will be rewarded as a result of the innovative tokenomics of AXIA. In order to truly grasp the value creation driven by coin burning, we must first understand how it works. What triggers coin burning? Where do the burned coins go? These questions and more will be covered in this week’s blog post. The hope is that by the time you get to the bottom of the page, you will have a firm enough understanding of how AXIA Coin burning works to explain it to friends, family and colleagues. Let’s get started!
What actions trigger AXIA Coin burning?
As noted, coin burning only occurs as a result of specific actions within the AXIA Ecosystem. Each and every time one of these actions takes place, coins will be burned and more scarcity of AXIA Coin will be created. Understanding how and when AXIA Coins are burned is paramount to understanding the hyper-deflationary economic system of AXIA.
Currently, there are six actions (these actions can expand over time) that result in coin burning. Let’s unpack them:
#1 — Each time a new user registers for an AXIA account
Every time a new participant joins AXIA and registers for an account that can be used across the ecosystem, 20 AXIA Coins are burned. For anybody that is new to AXIA, registering for an AXIA account gives you access to all of the AXIA products and platforms, from Use-to-Earn apps like AXplorer and AXchat to the AXIA Member Rewards Center.
#2 — Every time an AXIA Coin is acquired inside the AXIA Ecosystem
Right now this would primarily occur when an AXIA Capital Bank participant exchanges a fiat or cryptocurrency for AXIA Coin. For every AXIA Coin that is acquired within the ecosystem, an equivalent AXIA Coin is burned. If two AXIA Coins are acquired, two AXIA Coins are burned, and so forth.
#3 — Every time an AXIA Coin is staked at AXIA Capital Bank
Whenever a bank member joins the staking program, an equivalent amount of AXIA Coins that are being staked are also burned.
#4 — Every time an AXIA Coin is removed from a staking pool
Whenever a staking subscription reaches its conclusion, those AXIA Coins are removed from the staking pool and returned to circulation. For every AXIA Coin that is removed from the staking pool during this process, an equivalent number of AXIA Coins are burned.
#5 — When AXIA Coin daily rewards are generated in a staking pool, an equivalent amount is also burned
For all AXIA Coin rewards that are generated on a daily basis through the staking program, an equivalent amount of AXIA Coins are also burned.
#6 — Every time an activity in the ecosystem generates proceeds or an eligible fee
AXIA is a non-profit, so for any proceeds that are generated through any of the ecosystem applications, platforms or associated businesses, an equivalent amount is also burned. As a result, all the value from those proceeds is only used to strengthen the support for AXIA Coin.
Trusty tip: The AXIA Staking Program enables an aggressive 4-to-1 coin burning model that guarantees that for every AXIA Coin that is ultimately staked, there will be four burning events; when the initial AXIA Coin is acquired, when that same AXIA Coin is staked, when rewards are generated, and then when all the AXIA Coins leave the staking pool. Thus, the individual that is staking is not only benefiting from the innovative staking reward model program offered by AXIA, but is actually creating significant value for themselves and others simultaneously by amplifying and adding velocity to the reduction of the supply of AXIA Coin.
What happens to the AXIA Coins that are burned?
All the coins that are to be permanently removed from Total Supply through participation, staking, fees and collection from any application, platform or activity on the network will be burned by sending the AXIA Coins to an AXIA Coin burner smart contract. The smart contract makes certain that any AXIA Coins that are burned will be permanently irretrievable and considered removed from existence.
Frequently asked questions
Although the process of AXIA Coin burning has now been thoroughly explained, it is still understandable that you may have some lingering questions. Here are two of the most common questions that have been asked by the community that will help further inform your knowledge of AXIA Coin burning:
Q: Will there ever be changes to the current coin burning triggers?
A: Yes, as the AXIA Network goes live, more DeFi platforms are introduced and more utility is added to the AXIA Ecosystem, new coin burning triggers will be added to create even greater scarcity of AXIA Coin.
Q: If AXIA Coin burning increases in velocity, won’t all the AXIA Coins be burned eventually?
A: Absolutely not. There are several factors to consider here. Firstly, AXIA is burning the “equivalent” amount of the AXIA Coins that are held during the events that trigger coin burning. The AXIA Coins you and others actually hold in your accounts are not being burned and never will be as long as they are in your account.
Another important concept is fractionalization. Today, unless you have a significant amount of capital, you are not likely to purchase one entire Bitcoin. It is much more common that someone would purchase a small fraction of one Bitcoin. The same concept for AXIA exists; as it continues to grow and the supply is reducing that much faster based on the hyper-deflationary model, this concept may become something that is more applicable tomorrow than it may be for some today. Rather than acquiring one or more AXIA Coins, it may become common for just a fraction of one to be acquired in the future.
Conclusion
When it comes down to it, the concept of coin burning is actually relatively simple and can be boiled down to a basic formula: participation + coin burning = scarcity. The more participation there is — exchange, staking, DeFi activities, etc. — the more coin burning will occur, and the more scarce AXIA Coin becomes, creating more and more value. This perpetuates a system where each and every action creates value for yourself and others, which runs in stark contrast to the traditional economic model in which individuals compete with one another in a zero sum game based on a monetary system that is reliant on debt accumulation.
Coin burning ensures that there will be less AXIA Coins available tomorrow than there are today. The velocity with which coin burning will occur will only grow in time, so early holders and AXIA adopters can feel good about supporting the project at an important inflection point. With the forthcoming launch of the AXIA Network, the introduction of a number of key DeFi platforms and the continued development of the rest of the AXIA Ecosystem, more and more value will continue to be created each day through the ongoing burning of AXIA Coins.
