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Is there a destruction mechanism for SUI coins?

Joseph Gordon-Levitt
Release: 2024-09-28 20:07:01
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Is there a destruction mechanism for SUI coins?

Destruction mechanism of SUI coin

SUI coin is a decentralized finance designed to solve the scalability problem of blockchain ( DeFi) cryptocurrency. To maintain token scarcity and control supply, SUI deploys a unique burning mechanism.

How to destroy SUI coins?

The destruction mechanism of SUI coins is linked to transaction fees. Whenever a user conducts a transaction on the SUI network, a transaction fee is incurred. These fees are not distributed to miners or validators, but are permanently removed (destroyed) from the circulating supply at regular intervals.

Burn Rate

The burn rate, which is the proportion of SUI coins removed from the circulating supply, will be dynamically adjusted based on network activity. The higher the activity, the higher the destruction rate. This ensures that when network usage is high, the SUI coin supply grows at a slower rate.

Benefits

The burning mechanism of SUI coins provides several benefits:

  • Supply Control: Burning SUI Coins help control supply, thus maintaining their scarcity and increasing their value.
  • Deflationary Pressure: The burn mechanism creates deflationary pressure that may cause the SUI coin to appreciate over time.
  • Governance: The connection between network activity and destruction rate encourages active user participation, thereby improving the efficiency of network governance.

Conclusion

The SUI coin burning mechanism is an innovative solution designed to control supply, create deflationary pressure and promote network participation. By regularly burning transaction fees, SUI Coin ensures its long-term scarcity and value stability.

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