PEPE token: the destruction mechanism and supply
PEPE, the meme coin, destroyed 50% of its supply, which is 210 trillion tokens, at once. The purpose is to reduce the circulation and make the remaining ones more scarce. However, due to the issuance of new tokens, rewards and continuous destruction, the current circulation and the maximum number is still 420 trillion. Yes, the maximum is 420 trillion, and this number is fixed.
PEPE had 420 trillion tokens at the beginning. In order to make everyone think that this token is more popular, the developers decided to destroy half of it, which is 210 trillion. In this way, there are fewer in circulation, and everyone will think that the remaining ones are more valuable.
But there is a confusing point here: destroying tokens does not change the number of "the maximum number of tokens" set in the smart contract. This number is fixed, that is, the total number of tokens that the project can have. PEPE is like this. After destroying the 210 trillion, the maximum is still 420 trillion.
Although so many have been destroyed, there are still so many in circulation. What's going on?
The destroyed ones are back: After destruction, some tokens may return to the market through various means, such as staking rewards, liquidity pools, or community activities. In this way, there are still many in circulation.
Destruction is not permanent: It is also possible that the destruction is not a one-time thing, or it is part of a dynamic destruction. In this case, the tokens may be destroyed and then issued again.
Newly issued and rewarded: Some meme coin projects, like PEPE, may issue new tokens, or issue tokens for staking, airdrops, community rewards, etc. In this way, there are still many in circulation after destruction.
The role of how many tokens can be used at most:
It is necessary to understand the difference between the circulating and the maximum.
Circulating: The total number of tokens that can be bought and sold and used in the market.
The maximum: The total number of tokens that the project can have, which is fixed. The maximum number of PEPE is 420 trillion.
Destroying tokens will affect circulation, but it will not directly change the maximum number unless the smart contract is changed. PEPE has not changed yet.
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