Progressive Deflation
Stars Don't Shine, They Burn
Let's split the concept of deflation into traditional finance and cryptocurrencies. Whilst in traditional finance deflation is a negative thing, it's actually a positive thing for cryptocurrencies.
In traditional finance, deflation can signal an impending recession and hard economic times. When people feel prices are headed down, they delay purchases in the hopes that they can buy things for less at a later date. But lower spending leads to less income for producers, which can lead to unemployment and higher interest rates.
In the cryptocurrency world - and especially in decentralized finance - deflation can only be seen as a positive effect for both investors and liquidity providers. Deflation of a cryptocurrency typically originates from an increase in scarcity of an asset, thus resulting in an increase in purchasing power for who holds that asset.
Progressive Deflation designates a percentage decrease in the total circulating supply over time. The Uniqo protocol constantly burns and sends UNIQO tokens to the burn address with every transaction. These burnt tokens will no longer be recoverable: they will be eliminated forever from the circulating supply, generating progressive deflation.
A percentage of the taxes on the entire traded volume of Uniqo is allocated to the burning of the tokens and is being sent to the burn adrress at each transaction, leading to a reduction in the circulating supply and a progressive percentage increase in the tokens burned.
Tokens sent to the burn address will no longer be recoverable.
- Permanent deflation The deflation of the Uniqo protocol is based on a continuous percentage decrease in the supply, since tokens are constantly burned with every single transaction.
- Increase in asset value According to the scarcity principle the value of an asset is directly correlated to its scarcity and the demand for it. In other words, in conditions of equal demand, progressive deflation is a catalyst for progressive UNIQO price appreciation.
- Generating profits The two previous elements contribute directly to the speculative interest of investors. Positive consequence that can be extended by a possible buy back and burn by the protocol. The whole process leading to the combustion of the coins will benefit the holders and new potential investors.