What is the BEST Burn?
Lukas Kurzmann
The Bitpanda Ecosystem Token, or BEST for short, is the in-house token of Bitpanda, one of the leading crypto brokers in Europe. The token was offered for pre-sale in 2019 as part of an Initial Exchange Offering (IEO) and has been an important part of the entire Bitpanda ecosystem ever since. In addition to the many benefits that now exist, token burns have also been taking place at regular intervals since January 2020. Up to 25%, but at least 2,500,000, of all fees collected by BEST VIP holders are burned in the form of BEST on the last Thursday of the month. This will continue until there are only 250 million left. This means that at the end only 25% of all BEST ever in existence will be available.
Why was the Token Burn introduced?
The idea of token burns can be compared quite well with the buyback of shares by companies on the stock exchange. Companies buy back their own shares, which reduces the number of shares in circulation. This in turn increases the value of the share, which benefits the shareholders. Applied to the Bitpanda Ecosystem Token, this means the following: BEST are destroyed irrecoverably on a regular basis. This reduces the total amount in circulation and therefore regularly increases the value of the token. This value is defined by the price times the amount in circulation and is also referred to as market capitalization.
In addition to the BEST Burn, there are also other exchanges and platforms that regularly burn their own tokens/coins. A prominent example of this is Binance with its BNB.
How does the BEST Burn work?
BEST is currently an ERC20 token on the Ethereum Chain. This will change in the future, as BEST will get the Pantos technology. This means that Bitpanda’s in-house token will be upgraded and will be supported on all chains made available by Pantos in the future.
The token’s smart contract contains a specially implemented burn function. This function is then called by Bitpanda (but can also be called by any other token holder). This then sends a specified amount to the address 0x00000…00000. Here you can find details of a BEST burn that has already taken place. As soon as a burn has been successfully carried out, the tokens are irrevocably destroyed and the quantity in circulation decreases accordingly. This page also contains a list of all burns that have already taken place and further information. As every burn is an event on the blockchain, these are also transparent and traceable and can be viewed by everyone.
What are the effects of the BEST Burn?
In addition to the previously mentioned decrease in the quantity in circulation and the associated increase in the value of the token, the supply of available Bitpanda Ecosystem Tokens also decreases. This can have an impact on the price if the demand is greater than the existing supply. At the same time, the burn also serves as protection against inflation, which describes another positive aspect. With a little foresight, it will become even more interesting to own BEST in the future as the supply continues to decrease. This means that the interest of hodlers will increase from burn to burn.
