Startup Plans to Destroy All Tokens
The token-burning process is an essential part of the progression of an Initial Coin Offering into a substantive token economy. Without the eventual destruction of some coins, it becomes difficult for existing tokens to maintain their value, or to gain in value like many early investors speculate that they will. By hosting regular token burnings, a newly-created token economy can artificially spur the ecosystem on and create value in existing tokens held by investors.
The process is very important, in no small part resultant from the massive amount of price manipulation, fraud, and hustling that occurs in the current Initial Coin Offering market. Millions of dollars have been lost to scams while regulators all over the world have tried their best to keep up with the new and massive industry. In an attempt to quell fears from investors that the industry cannot be properly regulated, many platforms use token burning as a way to guarantee value for token buyers.
But one startup has taken the idea of token burning to a whole new level. Digipulse is an inheritance and risk management platform, and the company has actually decided to burn every single token they created by the end of this year, 2018. Their reasoning for the chaotic decision is that speculation had driven the price of the token artificially.
The Digipulse platform was designed to give cryptocurrency investors the opportunity to manage their assets if something were to happen to them, in the cases of death or incapacitation. The platform also gives cryptocurrency holders the opportunity to manage their assets in a way that allocates resources to loved ones over the course of time.
But they have now made the decision to do away with the DGPT tokens, functional tokens which were supposed to be eventually used in the allocation and asset management process provided by the Digipulse platform. The main purpose of the DGPT token was rooted in the functionality of the process. But according to the startup company, the token was only used for its intended purpose by two of the 320 users that had signed onto the site since its opening on July 25th.
As a result, the company has concluded that most participation in the project is only speculative, a result of investors looking to profit when the coin hit the public and the price eventually rose.
For those that currently hold the DGPT Tokens, there are two options. Those that have over 10,000 of the tokens are able to exchange their coins for a share in the profits of the company. But for smaller buyers with less than the requisite 10,000 coins, they have the opportunity to become “lifetime” members of the Digipulse premium subscription. The length of this description is based on the amount of coins held by the investor.
The decision will certainly create some controversy among holders of the token, many of whom expected to profit from their participation in the DGPT ecosystem.