In a village, there is a significant amount of wood (300 tons) that has been left abandoned. Because they do not use it, the wood has no value to the people living in this village. Three merchants made a promise to invest this amount in ways that would benefit the people of the village. The merchants used these woods for the following purposes:

The first merchant began by collecting money of the poor villagers receiving 100 tons of wood in return and promised them to trade in the wood and gain a fortune. Afterwards, the merchant worked together with one of the central markets in the neighbouring village and started selling wood. This was an easy opportunity to make money as there are no other competitors in the market. He then put 20 tons of wood on sale, which is a considerable amount, and people started buying it, but not in large amounts. So, he began contemplating his method, since the central market is based on supply and demand, and the presence of 20 tons of wood does not help in raising the price, therefore the solution is to reduce the quantity offered in the central market. The merchant decided to burn 30 tons of the quantity he had stored in the village. He later appeared in the media stating his great sacrifices in burning these quantities and that they were equivalent to huge amounts of money ($400,000). The price of the wood put on the market was not affected, due to the lack of value in the burnt quantity as it was abandoned and was not related to what was being offered in the market. In conclusion, burning the wood was just a marketing ploy that did not result in any tangible result.

The second merchant received a 100 tons of the wood, but he used a different method when burning the wood. He sent 20 tons to the market, just like the first merchant, but he didn't burn off the wood he owned. Instead, he went to the market and purchased 1 ton of wood, which he then burned. Buying this quantity and burning it resulted to a positive impact on the price of the wood which benefited everyone who invested in it. This method of burning is considered as an honest way to support the wood business, as purchasing wood leads to a reduction in the quantity available in the market, which benefits investors financially, but also leads to an increase in the price of wood.

The third merchant dealt with burning differently, as he set out to burn a certain percentage of the wood from the buying and selling operations. This burning is also considered to be an honest method that ensures reducing the supply of wood while increasing its price in a continuous and stable manner.

Using the same method as the first merchant is often applied when burning cryptocurrency, but it is considered an ineffective marketing trick (regardless of whether it is being offered on a central or decentralized exchange).This is because when the smart contract or the blockchain is created for any cryptocurrency, it is required to specify the number of crypto, and a wallet specified for burning can also be created (known as dead wallet) and the cryptocurrency sent to this wallet cannot be returned, and therefore they are considered as if they were actually burned. However, up to this moment, the burned crypto have no value at all, and does not cost the team anything. For example, it is possible to create 1000 crypto, burn 900, and then allocate 100 crypto in circulation, but the result would be the same if they has started with 100 from the beginning. The method of the cryptocurrency burning may have been done differently in the previous examples. For example, an amount of 100 cryptos are added to the liquidity pool, and the rest is distributed to wallets owned or managed by the crypto team, and then the team burns a number of these crypto after the trading has begun to manipulate the investors that are sacrificing their money, while dealing with worthless currencies like the abandoned wood. By not introducing more cryptocurrency in the future (more wood on the market in our example), there be harm avoided.

Dear reader, do not be affected by the fraudulent burning of cryptocurrency, and do not hesitate to check the wallet of the burnt contents that are handled by the crypto team. There are three methods that allow burning to be beneficial: first is burning the cryptocurrency after they have been purchased, second is using a function in the smart contract that burns a percentage of the buying and selling transactions directly, and finally you can use a function that burns cryptocurrencies automatically after purchasing them in the event of a decline in the price, and these functions are among the mechanisms in the AMAL smart contract.

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