Why is Dogecoin burning their coins?
It’s accepted that scarcity drives the value of anything. It’s why people will pay hundreds of thousands of dollars for a Babe Ruth rookie card, even though the paper it’s printed on is worth less than a cent.
This applies just as much to cryptocurrency. And in the world of cryptocurrency, no coin is more common than Dogecoin.
In fact, by the end of 2014, there will be 100 billion dogecoins in existence, far more than any other coin out there. As a result, the supply is far higher than the demand. That may be a result of a lack of foresight from the Dogecoin devs, since none of them thought Dogecoin would take off like it did.
But regardless, the Dogecoin community has recognized this. And so, we have Dogeparty.
The participants in Dogeparty have decided to start burning their coins. That is, they’re sending them off to a bunk address, essentially destroying the coin.
The purpose of this is twofold. First, to decrease the supply of Dogecoin, and hopefully help their current fading fortunes. Next, to create a new coin to exist alongside Dogecoin, with much more potential.
To reward shibes for burning their Dogecoin, the Dogeparty devs will distribute Dogeparty coins, or XDP. The going rate is 1000 DOGE for 1 XDP, though early adopters will receive a 50% bonus.
The burn phase started on Tuesday August 12th, and lasts for 30 days. After that, burned coins will no longer be accepted.
There’s more to Dogeparty than just a new coin, though.
Dogeparty can be used by content creators, event planners, and charitable organization to solicit Dogecoin donations in exchange for a token which they can us to receive a copy of their work, a ticket to their event, or some other reward once completed, like a crowdfunding platform.
While it seems counterintuitive for shibes to destroy their Dogecoin, Dogeparty could go a long way toward helping Dogecoin recover from its recent fading fortunes.