Introducing Buy 'n Burn
Hello HIVE. @buynburn is a brand new account that I created for the purpose of burning alt-coins on HIVE-Engine.
One burns a coin by sending the coin to @null. Since there is no way to pull funds out of @null, the system considers the coins lost forever and decrements the value of the coins from the official coin count.
Burning coins reduces the float. Reducing the coins floating on the market can improve the price of a coin.
Since burning coins reduces the float for a coin, it is seen as a good way of rewarding a community.
A HIVE user can create a "burn post" by setting the beneficiary of the post to @null. The PeakD interface includes such a feature.
A burn post will burn the author rewards for the post while preserving the curation posts.
The interface marks burn posts with a little burn emoji.
I plan to do something different. I am not using this feature.
The Value of Burn Posts
Some times authors create burn posts because they want to emphasize that they are writing the post for reasons other than monetary rewards. Some times people auto burn coins to emphasize that a post is for the tribe.
Burning Alt Coins
The system will send the alt-coins referenced by a post to @null. You can see the total number of coins by examining the wallet of the @null account.
https://peakd.com/@null/wallet/hive-engine
The automated burn program burns alt-coin. Unfortunately, the amount of alt-coins burnt is based on the coins in the curator's post. Most curators have more HIVE in their wallet than alt coins.
The Build A Whale Burn
The account @buildawhale has been publishing a series of burn posts for the last several years.
I've followed their effort. They have burned several thousand HIVE to date.
Unfortunately, their program burns only a few alt coins.
Burning and Liquidity
If you examined the HE Tokens page; you will find that many of the coins have a low daily volume.
Burning a post reduces the float of a coin on the market. While a straight burn reduces the float of a coin, it does nothing to help with the liquidity problem.
The only way to solve the liquidity problem is for some poor schmuck to buy the coins.
IMHO: Buying and then burning the alt-coins will do more for Hive Engine than a pure burn.
I Want to Burn Alt-Coins
I decided that I wanted a way to burn alt coins.
I wrote posts on my primary account ( @yintercept ). The posts promised to use all proceeds to burn alt-coins.
The problem with this approach is that the post confused my efforts to accumulate coins with my desire to burn alt-coins.
I realized that the best way to fill my burning desires would be to create a dedicated account. While the separate account does not eliminate the possibility of malfeasance, it is possible to audit the account.
Auditors can examine use the Hive Engine Explorer to examine the transactions of the account and unroot any fraudulent activities
https://he.dtools.dev/@buynburn
I am sure that there are witnesses who would gleefully downvote my primary account into oblivion if I transferred money out of a dedicated burn account into my account.
How I will Benefit from the Burn
Everyone who exercises regularly knows that there is a benefit to the burn.
I've been trading HE coins since the inception of the platform. I tally up my coins on the first of the month.
I am actively trading many of the coins that @buynburn will be buying; so I will receive an indirect benefit from this effort.
The benefit is marginal.
Of course, if I was Donald I am certain that I would be indicted by a New York Grand Jury for having a burn program on the same platform on which I am actively trading coins.
Votes ... Not Delegation
This account will not do any voting; so it does not need a delegation.
I am hoping that people wiil upvote this post. I will use the proceeds from the upvote to buy coins on HE engine which I will later burn.
I Am Not Burning HIVE or HBD
I will use the HBD rewards from the program to buy and burn coins. The reason for this is that the witnesses are wanting the market cap of HBD to increase. Burning HBD or Hive undermines this effort.
Tracking the Burn
I will write weekly post to track the burn. I will summarize the burn on my personal home page.
It takes seven days to receive the rewards for a post. So I won't do anything until next week.
Let Me Know Which Coins You Want to See Burn
Let me know the coins which you want to see burn. Also tell me if their are coins which you want me to ignore.
Posted Using LeoFinance Beta
HIVE has several comment tokes including BEER, WINE and PIZZA.
My thoughts are that the @buynburn account should accumulate enough these coins to be able to give awards, but should then burn any excess.
Should the account be able to give comment awards or should it just burn everything?
!WINE
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There isn't really any benefit to having more burn posts, if there is a token not listed you want let me know. Most of the HE tokens have so much inflation no amount of burning will make any difference. Some tribes have over 25% inflation.
Not quite the same. We want users, distributing more rewards to the same users isn't the same thing.
I agree with this. Automated burn posts appear to have little impact on the HE coins.
The alt coins are falling because tribal coins produce more interest than the market can absorb.
In the long run, the only way to stop this problem is to attract more users.
Buying Coins Seems To Make an Impact
Oddly, the act of buying coins appears to make a short term difference.
Since the trading volume of many the coins is less than a dollar a day, the simple act of buying a HIVE worth of coin can make a huge impact with some of the tribes.
The Account Focuses on Marginal Coins
I want to focus on marginal coins like CCC and FOODIE. These tribes tend to attract artist types who are selling their coins as they earn them.
This effort will get rewards to the smaller accounts.
A Market Maker that Occasionally Burns Coins
The real goal of this project is to create a market maker that buys and sells coins. The program will occasionally burn the acquired coins.
My hope is that adding a program that is actively buying coins will help increase the liquidity of the coins.
This might help attract users into using HIVE Engine.
Burning HBD and HIVE
The final point of this project is to argue against burning HBD and HIVE.
To attract users, both HIVE and HBD need to have a high market cap.
Conclusion
I have actually followed many of the different burn efforts. Most of the programs do not make a significant impact on the coins.
I am creating a new program because I think it is possible to structure an account that makes an impact on the marginal coins.
The thing is the market isn’t absorbing them most everyone is just selling them.
Because no one else is. You can double most Hive Engine token market caps with as little as 2 Hive. You are correct about short term, but I think it’s likely shorter than you think as you can quickly double the market cap with a couple of Hive and the first dump for for the same or less will bring it back down again. Without utility and userbase there is really chance of it changing.
Does it though, like does it really matter in the end? So the price changes but without volume or liquidity it meaningless.
Not a bad goal but it is like peeing in the ocean in Japan and saying it tastes funny in the US.
We need marketing that isn’t just throwing cash down the drain with nothing to show for it.
I firmly believe at this point the only thing that matters is more users. It will solve almost all of our problems. With a typical cost to acquire customers at or exceeding $200+ it becomes is very difficult to sustain.
I believe that HIVE Engine is the most likely source of new users. Splinterlands seems to draw more users to the platform than the forum.
Serious developers will judge HE on daily volume of the coins.
Anything to increase the daily volume is good.
Use Cases of HE Coins
Most of the coins on HE were issued by people who wanted to fund projects with the creation of a coin. In most cases, the interest was the only use case for the coin.
That design was not sustainable. It led people to drop cookie cutter tribes with coins that were guaranteed to collapse.
Many of the alt-coins simply gave money to the creators of the coin then left the public holding a bag.
The question in my mind is: How does one create a compelling use case for a coin?
The best way to create a compelling use case for a coin is to create a mechanism that buys the coin.
People are more likely to use a coin if they know that there is a future buyer for the coin.
Simply buying coins increases the market capitalization of the coin. Users fear that all the generated coins will come back and swamp the market.
The ultimate use case for any coin would involve a mechanism that buys the coin and then burns the coin.
The account @buynburn is not simply about burning coins.
I intend the account to fuel a discussion about ways to create use cases for coins on HIVE engine. The ultimate use case for any coin is something that buys the coin and then burns it.
Buying coins is not a use case, it's a bandaid for a broken product.
This is likely illegal in many countries.