Token Burning, DAO’s, IEO’s: 3 ‘hot topics’ within the cryptocurrency sector

Token Burning, DAO's, IEO's: 3 'hot topics' within the cryptocurrency sector

Token Burning, DAO's, IEO's: 3 'hot topics' within the cryptocurrency sector

Developments are taking place rapidly within the cryptocurrency and blockchain industry. Of course, the bitcoin rate has been in a nice uptrend since April this year and that is good news. But there are so many more positive and interesting developments within this sector. In this article you can read about three trends that are currently ‘ hot’ .

Token Burning (destroying crypto tokens)

Token burning, or literally translated “burning tokens”, means that a crypto project or cryptocurrency exchange tokens repurchases and destroys them. This concept is not new, companies do this more often with their own shares.

For example, Apple bought back $ 100 billion worth of shares last year and then destroyed it. Why? The value of the shares that still exist increases as the offer becomes smaller. The dividends also increased by 16%. The same can be done with cryptocurrencies. A good example is TRON that will buy back millions of TRX tokens.

Decentralized Autonomous Organizations (DAOs)

DAO is an abbreviation for Decentralized Autonomous Organizations . These are autonomous companies that operate in principle on a blockchain. The company operates thanks to rules and assignments that are laid down in a smart contract.

Participants in such an DAO can vote for, for example, the appointment of a new manager. Participants can also vote when and with what result bonuses must be paid. In short, a DAO can decentralize running a company and thus make it more democratic.

Initial Exchange Offerings (IEOs)

2017 was the year of the Initial Coin Offering (ICO) . Investing was a breeze and every now and then new millionaires were born thanks to a smart investment, or just luck. Nevertheless, the concept turned out not to be very successful for most crypto investors.

For example, a study found that more than 78% of ICOs in 2017 were pure scams. A lot of money was lost and regulators worldwide gradually put an end to it during 2018. Since then, the total amount collected via ICOs has fallen sharply.

However, there is an alternative: the Initial Exchange Offering (IEO) . These are basically just ICOs but then regulated by a cryptocurrency exchange. In this way, investors can safely invest in projects selected by an exchange. These exchanges, such as Binance with its Launchpad platform, first screen these projects thoroughly to prevent them from being a scam. In this way, investors are only presented with projects that have the potential to generate a good return.

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About Shawn Morrison 204 Articles
One of the founders of BitzArena. Active with crypto currency since the rise of the bitcoin. Loves the innovative character of crypto and blockchain technology, and follows developments in the market closely. Likes to connect technology with business, and likes to make difficult concepts accessible to a wide audience.

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