The buyback and burn initiative of Ether.Fi is garnering significant attention, as the company pledges to spend $2 million every month to buy and incinerate ETHFI tokens. The purpose of this action is to create scarcity and boost the price of the token.<\/p>\n
There is a certain credibility to Ether.Fi\u2019s buyback and burn program that one does not find with many crypto projects, which are content to simply mint new tokens as a means of funding incentives. What gives Ether.Fi an edge in terms of market impact is that the initiative is backed by actual revenue. On a monthly basis, $2 million is used to buy ETHFI from the open market permanently. As Altcoin Buzz has pointed out in their analysis, this method of removing tokens from circulation should account for about seven percent of the market cap being burned over the course of a year. It is a way of curbing supply and creating a scarcity that ought to put upward pressure on the price of what remains.<\/p>\n
What drives the Ether.Fi buyback and burn is an effort to put upward pressure on the token\u2019s price. The host of Altcoin Buzz was quick to note that because the program is backed by real revenue rather than inflationary measures, it has a better chance of making an impact. But one should not mistake this for an improvement in the network itself; the security and technology of Ether.Fi remain unchanged, so any effect from the buyback is purely economic.<\/p>\n
The numbers from Altcoin Buzz bear this out: the initiative was given a 7.0 for its ability to move the value of the token, yet only a 5.0 when it comes to strengthening the network\u2019s foundations. Then there is the matter of staking. With just five percent of the total ETHFI supply currently staked, most of the tokens the buyback acquires are simply burned instead of being locked up for the network. It is a way of increasing scarcity without doing anything to foster more decentralization or activity on the network.<\/p>\n
One might call the Ether.Fi buyback and burn a headline act, but the Altcoin Buzz team would be the first to point out it is only part of the picture in terms of the platform\u2019s prospects. The move fits into a wider strategy with many variables at play that will determine Ether.Fi\u2019s performance and sustainability down the road. Should an investor wish to go beyond what is being announced on the surface, Altcoin Buzz has put together a more thorough analysis and some relevant metrics for review on its site.<\/p>\n
Source \u2014 Altcoin Buzz: https:\/\/www.youtube.com\/watch?v=BMeKRRdZMlM<\/a><\/em><\/p>\n <\/p>\n