Charles Hoskinson Explains Cardano's Lack of Token Burning Mechanism

Unlike a bunch of other cryptocurrency projects, burning ADA tokens to create scarcity is not possible.as it would be "stealing" someone else's property, said Cardano founder Charles Hoskinson.

He replied to a user who rebuked him for his ignorance. According to a commentator named PerAsperaVinco, the destruction of part of the property increases the value of the rest.

Hoskinson explained during the discussion that some other projects have a team-controlled reserve of tokens. 

"There are usually a few large premines that the founders control and destroy in order to manipulate the price during periods of low liquidity.The ADA doesn't have that," he wrote.

According to Hoskinson, all ADA tokens are owned bytheir holders and staking pool operators. They are rewarded in a coin and taking away their ADA for burning will be nothing more than theft of property, the founder of Cardano emphasized.

In the Ethereum network, the coin burning mechanism in the form of part of transaction fees was activated in August 2021 during the London hard fork. 

At the time of writing, the total number of liquidated tokens exceeded 2.6 million ETH. According to the forecast, after updating The Merge and switching to the Proof-of-Stake algorithm, the network will become deflationary.

One of the commentators recalled that Ethereum is technically unlimited. ADA, by analogy with bitcoin, has a limit on the market supply of the coin, he noted.

Recall that Cardano bypassed Bitcoin in the ranking of global brands, taking 26th place. Digital gold was on the 30th position.

Read ForkLog bitcoin news in our Telegram - cryptocurrency news, courses and analytics.