Pundi X token reduction, token burn, token buyback explained
Over the past few weeks, you have heard some token related terms, such as token reduction, buyback, and burn. They each mean different things, but at times used interchangeably. Pundi X actually has all three — token burn, token buyback and token reduction.
This is a short article to explain what they are to set out the right expectation.
Effect: New Pundi X token with 1000 reduced supply.
Objective: Increase usage, exchange support, DeFi adoption.
Actions needed: It will be automatic or manual for users based on respective exchanges and wallets.
Timeline: Late March 2021 till late March 2022. Exact time TBA.
There is no change in the value of the new tokens a user holds after token reduction compared to the total value of the old tokens. For example, if you are holding 1,000 NPXS, after the reduction your holdings will be 1 new Pundi X Token. The total value of the NPXS token remains the same, hence instead of, for example $0.002 per token the list price of the Pundi X new token will be reflected by the market at $2 per token while the total number of your new Pundi X token will reduce by 1,000 from your current holding.
From there, the price of the new token will move up or down according to the market. The company and exchanges will make sure that the token value of the new token follows Pundi X’s market capitalization accordingly.
Instruction of swap for new Pundi X token and supporting exchanges will be announced in a separate article. Please follow our official website, blog and across our social media channels: Twitter, Facebook, Telegram, and Reddit.
Effect: Buy back tokens from the open market by founders.
Objective: Founders have strong confidence in Pundi X development by buying back tokens from the open market, hence reduce the token circulating supply.
Actions needed: Users don’t need to do anything.
Timeline: 8 times since 2018 and continuing.
Pundi X founders have done token buyback back in 2018 and 2019 for five times totaling to 1400 ETH and I personally did three more buybacks in 2021 after NPXS hitting certain price target. 2021’s next buyback will take place once NPXS hits $0.005 price target. The buyback token is an unscheduled event to decrease token circulating supply in the market and I am still committed to buyback more from the open market, from time to time.
Effect: Remove token from the total supply permanently.
Objective: Tokens burnt from XPOS utilization as well as other utilities as promised in ICO.
Actions needed: Users don’t need to do anything. Quarterly token removal is done by the company
Timeline: Every quarter since August 2018 and continuing. Burnt value is over $50m based on the current rate.
All removed token events has been announced to public and executed quarterly (every three months). It will be reflected on the total supply where you can see the the max supply and the current supply are different in coinmarketcap. To simplify, we can think it as delete x% token supply from the supply. In project Pundi X, NPXS is the native token in the ecosystem and all transactions in Pundi X will burn NPXS token. We have been burning the NPXS token quarterly (totaling so far $50m in value, based on the current rate) since 2018 and will continue every quarter. The increased utilization of NPXS in XPOS, XPASS, and XWallet ecosystem will also increase the token burn since it is the native token.
Hope this help you to know more about terms we use for Pundi X token activity. There are also complete articles on each of these, including timeline, reports and more in the upcoming and past official Pundi X blog posts.
As usual, feedback are always welcome.