Floki’s development team has recommended a considerable token burn, targeting a 2% reduction in the altcoin’s circulating volume. This equates to the elimination of nearly 190.9 billion FLOKI tokens, a move valued at upwards of $11 million. The plan aims to not only shrink the supply but also to underpin the security of the network.
Initiative for a Leaner Circulating Supply
The proposal, outlined by lead developer B, involves sending the tokens to a crypto wallet out of public reach, thus permanently deducting them from the supply pool. This method is seen as a driver for price elevation, drawing from the aftermath of a similar action preceding a 70% surge in Floki’s price earlier in January 2023.
The tokens designated for burning originate from a reserve once parked on the Multichain Bridge. This service, which ceased operations in July 2023 due to a massive security breach costing over $130 million, had facilitated cross-network token transactions. Floki had proactively retrieved its tokens from Multichain before its downfall, and since then, these have been safeguarded in a multi-signature wallet.
Developer B mentioned the hack and subsequent security worries as the impetus for removing the tokens from their prior location and now opting to burn them. This step is aimed at negating the risk of these tokens potentially reentering the market, as part of a broader strategy to uphold the integrity of the token and safeguard investor interests.
Market Responds Positively to Token Burn News
Following the token burn announcement, Floki’s market price experienced an uptick, recording roughly 8% growth. This development is in tandem with the general market’s upward trajectory, which has been notably influenced by Bitcoin‘s rally past the $60,000 mark.
The market’s optimistic reaction signifies trust in Floki’s aggressive measures to manage supply and strengthen network defenses, potentially setting a precedent for similar cryptocurrencies in the industry.