Step Finance, a key player in the Solana ecosystem, is marking its 3.5-year anniversary with a major announcement.
The platform has revealed plans to burn 192 million $STEP tokens, currently valued at $8.7 million. This isn’t Step’s first token burn. In June, Step Finance removed 12.5 million $STEP tokens from circulation as part of a broader strategy to manage token supply. Now, they’re taking it further.
Where Are These Tokens Coming From?
The tokens being burned come from two sources: 150 million will be drawn from Step Finance’s unused community reserve, while 42 million have been bought back using the platform’s revenue. All of the revenue generated by Step is used to repurchase $STEP tokens from the market. Once bought, the tokens are burned, reducing the overall supply.
The aim of this burn is simple: to increase the scarcity of $STEP and reduce its Fully Diluted Valuation (FDV). By removing a significant chunk of tokens, Step is positioning itself to support the long-term value of the asset.
🚨 LATEST: @StepFinance_ has burned 50M $STEP tokens (valued at $2.27M) as part of its ongoing campaign to burn 192M tokens (35% of the total supply). pic.twitter.com/POa7lDU2ck
— SolanaFloor (@SolanaFloor) October 7, 2024
A Phased Burn Process
The burn isn’t happening all at once. Step Finance has started with 50 million tokens, with more burns set to follow over the coming weeks. Once the full 192 million tokens are out of circulation, roughly 90% of all $STEP tokens will be in the hands of users. Interestingly, this is one of the highest circulation rates in the Solana ecosystem.
At least half of the whole memecoin meta is them being fully distributed coins with no outrageous FDVs, VC involvement or upcoming token unlocks
Well, STEP is now 90% in circulation. Maybe the best FDV ratio for any active DeFi project today.
With absolutely zero VC… https://t.co/vCw0w9rMNY
— Gary | Step Finance (@ceagleoneism) October 8, 2024
Why Token Burns Matter
Token burns are a common method used by blockchain projects to control supply and enhance value. By decreasing the number of tokens in circulation, Step is boosting the scarcity of $STEP tokens. This could potentially lead to a rise in demand and price over time.
Furthermore, this move benefits both investors and users of the platform. Fewer tokens in circulation has some advantages. For example, it reduces inflationary pressures. This makes it less likely for token prices to drop. The result is often a more stable token price and greater confidence in the project.
Disclaimer
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