Every day, a portion of the AAB supply is removed from existence through coin burns. In this article, we explain what AAB coin burns are.
What is AAB coin burn?
A coin burn is a process through which coins are permanently removed from circulation. AAX actively decreases the AAB supply through coin burns.
The amount of AAB coins burnt depends on the number of trades performed on the exchange every day. Each day, AAX burns AAB according to the overall revenue earned by the exchange on the futures markets.
The daily coin burn is auditable on the blockchain and can be monitored on aab.aax.com.
AAX plans to burn coins until 50% of the total AAB supply is destroyed.
A major reason why cryptocurrency projects adopt the coin burning process is to slow down inflation. By removing coins from the supply through coin burns, demand pressure may cause the asset to increase in value.
While coin burns do not guarantee an increase in an asset’s value, they lay a good foundation for that to happen. When the supply of the asset is reduced, and demand is maintained or increased, the value goes up since more people are looking to buy the asset that is now less in stock, so to speak.
AAB grows with the AAX exchange. The utility token provides unique use cases for traders on the AAX exchange. Traders use AAB to get a discount on trading fees, better lending and borrowing rates, and access to exclusive trading tools, signals, and bots.
As more traders use AAX, more people will be exposed to AAB, and as it will be cheaper for them to participate on the exchange, using AAB, we can expect demand to go up. The coin burn process amplifies the buy pressure by taking AAB off the shelves.