Understanding the $VIS Mint & Burn Ratio
By: Gabby Gorgonio | April 11, 2022
Understanding the mint and burn ratio of $VIS is crucial in knowing the economy and its overall health. This article hopes to equip you with sufficient knowledge that you may be able to comprehend the data that is shown.
What does Mint & Burn mean?
In order to grasp the data that will be presented later on, first, we have to define what both “minting” and “burning” is and why it is crucial.
- Minting – The creation of the tokens
- Burning – The destruction of the tokens
$VIS, as the primary earning and spending token within Pegaxy’s ecosystem is both created and destroyed within the game. At the moment we have…
- Earning $VIS – Winning races as an owner or renter. ($VIS is only MINTED once “claimed”)
- Burning $VIS – Breeding, Events, Name Changes, and many more as the game develops…
People who earn $VIS will eventually mint their tokens, and when they do, they are presented with the option to burn their tokens through the different options available to them such as breeding or they can choose to sell their tokens in the market.
Why does this all matter?
As it is impossible to have the mint and burn at a perfect equilibrium, the goal of the team and community is to see the mint and burn ratio at a reasonable balance, as this indicates that the tokens are being put back into the game. Applying simple supply and demand concepts…
- A high burn rate will show that the utility token is being used for what it was meant to do
- A high mint and low burn would mean that there are tokens being held or sold
$VIS Mint & Burn Ratio
The Mint vs Burn ratio of $VIS as of 2022/04/06 – Source: https://apollo.pegaxy.io/
The blue line represents the $VIS minted and the red line represents the $VIS burnt during the day.
With the newfound knowledge you’ve come to acquire, the data shown in Pegaxy’s Apollo would now make more sense. The key is to look at the $VIS % burned in period (timeframe of your choice) to give yourself a view of where and how the utility token is being used. As an example, if mint-burn ratio was 100% that would mean all $VIS tokens are being put back into the game and its burning mechanics, while a 0% mint-burn ratio means that they either hold the tokens or have sold it for other crypto, which is a possible sign of inflation. Once again, the goal is to see the ratio at a reasonable balance.
Know that it is expected that the minted $VIS is higher than the burned due to the exponential growth of the number of Pega due to breeding, however, as the game continues to develop in both economy and multiple burning mechanics come to be, there will be changes to how people utilize their $VIS. It is in the best interest of the team and community to ensure a healthy economy, so remember to keep an eye on this chart to strategize your next moves!
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