In line with creating an ecosystem geared towards the future of investing, Bitpanda introduced the Bitpanda Ecosystem Token (BEST) in the scope of what has been the most successful European IEO (initial exchange offering) to date.
What is an ‘ecosystem token’?
As the leading European platform for digital assets, we are working hard on growing our existing ecosystem even further. In addition to the easy-to-use broker platform, which is our core product for everyone interested in investing in digital assets, we launched the Bitpanda Global Exchange for professional traders and B2B clients. But that’s just the start. We have more products and features in the pipeline for Bitpanda users.
The Bitpanda Ecosystem Token (BEST) offers its holders a wide range of benefits for existing and upcoming products and features: discounts on trading fees, priority access to the upcoming Bitpanda Launchpad and other features. Also, a part of the BEST tokens users spend on paying trading fees on the Bitpanda platform will be burned in ongoing intervals until 50% of the total BEST supply is “destroyed”, meaning that the tokens are no longer in circulation.
Why burn tokens?
The main reason why tokens are burned can be compared to repurchases (“buy-backs”) of shares by publicly listed companies. Companies “buy back” shares, thus reducing the supply of circulating shares (shares outstanding), adding to share value and thus benefiting shareholders.
In the case of tokens, a decrease in the supply means that there are fewer tokens in circulation, consequently rendering those tokens left after the token burn more valuable.
How are BEST tokens “burned”?
Bitpanda has a function implemented directly in the BEST smart contract to burn BEST tokens. Thus, BEST tokens are not sent to an inaccessible address. Instead, the total number of BEST tokens is minimised by removing them from circulation for good.
The BEST token burning process is relatively simple. When tokens are burned, we invoke the "burn" function of our BEST ERC20 smart contract located on the Ethereum blockchain. As a result, the smart contract subtracts the specific amount from both the account we want to burn from and the total supply. This smart contract is a matter of record on the blockchain so it is viewable and verifiable by all interested parties.
Ethereum smart contracts are self-enforceable, immutable contracts written in computer code. They can be seen as somewhat similar to a digital representation of a traditional contract, only these contracts are a collection of functions and data stored on specific addresses on the blockchain. Data can be queried and altered using functions depending on the implementation of the smart contract, for instance to check if an account has access to the funds to be transferred.
The removed tokens no longer exist after the burn event. This function enables the safest method for token burns and also has the advantage that Etherscan displays the correct number of BEST tokens.
BEST token burn function on Etherscan contract
First token burn event coming up in April 2020
Regarding the date, Bitpanda is going to burn the first batch in early April 2020, with 25% of the BEST received from Bitpanda users who paid their trading fees in BEST. From then on, BEST token burns will take place on a quarterly basis until 50% of the total BEST supply has been “burned” (removed from circulation).
Are you already holding BEST? If not, make sure to buy some BEST on Bitpanda today in order to take advantage of all the features of BEST!