Today we announce our plans to purchase and burn 50% of the total supply of DROP tokens. Starting from March 2020, we’ll be using 15% of the revenue generated from trading fees on Cryptophyl to purchase and burn DROP on a monthly basis.
As part of our mission to grow the token economy, we continuously seek to improve the value we deliver to our customers. One of the core incentives to use Cryptophyl is DROP: our own utility token which can be earned simply for trading. We're doing this in order to increase the long-term sustainability and grow the value of DROP.
Revenue, not profit
We’ve opted to use a 15% of Cryptophyl’s revenue from trading fees, and not profit. This is simply the sum of the fees charged by Cryptophyl during a given month, less any referral pay-outs and fee rebates. It’s not difficult to regulate spending with the objective of showing a desirable profit, whilst revenue is always earned, if users continue trading.
We believe this offers our customers a greater deal of transparency: that is, if we publish our monthly trading revenue for each asset, we’ll be able to demonstrate that we have in fact spent the correct amount of our revenue to purchase DROP tokens.
Buy and burn
The point of buying and burning is to reduce an asset’s total supply and increase its buy-side demand, leading to an increase in the long-term value growth of the asset. This model has been successfully implemented by major exchange services such as Binance. We’ve taken and improved this approach by using revenue instead of profit and conducting the purchase and burn on a more frequent, monthly basis.
The end goal is to ensure the sustainability of the Drop token incentive on Cryptophyl. As the issuance rate of DROP decreases exponentially, and Cryptophyl’s trading volume continues to grow, the number of tokens appearing in the market will slow down, and eventually, reverse. This means the total supply will be far lower, eventually being only 500,000 DROP tokens (50% of the total 1 million supply of DROP).
50%, or half, of DROP tokens will be purchased and burned. This is because Drop has features for holders - such as the ability to get airdrops when a new listing takes place or to earn up to 50% from the fees paid by users you refer. For these features and perks to work, a reasonable supply of DROP tokens must be available.
How it works
Cryptophyl will follow a pre-defined purchase and burn process as detailed below, to ensure consistency and transparency:
- At the end of every month, the trading fee revenue will be calculated based on the trading fees, referral pay-outs and fee rebates
- All revenue will be converted to BCH at the market rate
- DROP will be purchased on the Cryptophyl DROP-BCH market at the market rate
- Results will be published along with proof of burn (link to burn transaction on the Bitcoin Cash network)
You can review the DROP burn details on the Buy and Burn page.
We’re passionate about the simplicity, low transaction fees and scalability of SLP tokens. We feel that this radical change to one of the most popular SLP tokens will propel the long-term growth of Cryptophyl’s volume and the value of DROP, as well as the wider SimpleLedger token ecosystem. We’ll soon be releasing our new exchange application which will be packed with major improvements and features, as well as our non-custodial token exchange.
Any questions? Send us a message in our Telegram group or an email to [email protected]
Cryptophyl is the leading place to buy, sell and trade SLP tokens. Sign up to start trading here.
We do not provide advice
We provide our services on an execution-only basis. This means we do not provide investment or financial advice for any product. Where we provide factual information, market commentary, transaction procedure guidance or methods of managing risk, you should not construe these as advice. You are solely responsible for any decision to enter into any transaction.