Okay, so what happens when you burn a bunch of tokens, and then demand goes up?
- Then the token price pumps.
- But then you created a pump and dump scenario.
- And you lose a ton of users and demand on the dump.
- So again it looked like the token burn helped but in the long run it hurt the network by destabilizing it.
Yeah sure!! 100% with you. Indeed i say ideally... reality works different ;)
And yeah in the long run, less tokens could traslate into less adoption? what do you reckon?
I think the strongest networks will allocate inflation to the right places and also have token burns that generate income as well. At the end of the day inflation is provided to anyone that provably brings value to the network. The idea is that more value is provided by the user than is extracted from the network. Tokens burns, when done well, will also work nicely. But just assuming that all token burns are a good idea is not a smart strategy.