Tron-based memcoin generation platform SunPump has implemented a 100% token buyback and burn process, reflecting Justin Sun’s commitment to increasing blockchain profitability.
In the face of growing competition among memecoins, Tron continues to strengthen the position of its new product, SunPump.
Buyback model
Justin Sun wrote about the implementation of the buyback model. The creator of Tron emphasized that the decision was made by the community, which proposed burning liquidity pool (LP) tokens. This method is used by many popular projects, such as Shiba Inu.
According to Sun, here are the benefits of the coin burning mechanism:
- increasing the depth of token liquidity;
- the possibility of using burnt liquidity;
- improving compliance.
However, along with the pros, there are also cons to burning. Sun believes that explaining how the whole process works is quite difficult. This can cause misunderstandings among some community members.
The buyback model is more efficient than simply burning tokens, according to Tron’s creator. It is easier to understand and provides greater transparency.
The buyback model is an economic tool that allows projects to manipulate the supply of tokens on the market in order to increase their value.
The SunPump platform has already switched to a buyback model. This strategy is used by large crypto exchanges, such as Binance. However, many believe that the developers need to pay more attention to other aspects of the project’s development.
Chainscard founder and chairman Ben Todar calls for a more balanced approach to token governance. He says liquidity is key to growth and stability. Focusing too much on buybacks and burns could distract the SunPump team from equally important things.
“Adding liquidity, especially through LP tokens, will not only provide market depth but will also attract large investors,” wrote Todar.[/su_quote]
The introduction of a buyback model is just one of the innovations Justin Sun has unveiled in recent weeks. Other initiatives include lower fees, higher energy consumption limits, and plans to create a separate project using non-fungible tokens (NFTs).
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Source: Cryptocurrency
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