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Should Cardano Start Burning Coins.
There have been several debates across social media platforms about whether it is best to introduce a burn mechanism for Cardano (ADA) in a bid to boost its value.
Enthusiasts Join the Debate
On the one hand, many traders believe adding a burn mechanism could be beneficial to current Cardano holders as the initiative will ultimately boost ADA prices, while other enthusiasts of the project expressed fear over the long-term implications of ADA burning.
As widely discussed on a Twitter thread originally created by Cardano enthusiast @flantoshi, some users are of the opinion that Cardano developers should add a code that would burn a portion of the fees paid on the network.
These fees, which are paid in ADA, will burn off the total supply of Cardano. Current holders will be on the receiving end of the benefits of the burning exercise, as their holding value will record a sensational increase.
Commenting against this assertion are ADA holders who think integrating burns into the original Cardano protocols could disincentivize people from using the network.
“If people are actively disincentive from using a network due to deflationary pressures, hype eventually dies as nothing happens on the blockchain,” a freelance journalist said.
People argued further that developers could be forced to migrate to other networks with a huge community in a bid to see their applications used by a large number of enthusiasts.
Why Calls to Add Burns to Cardano
Understandably, investors’ call to integrate burn codes to the ADA token is a result of the underperformance of the cryptocurrency since it peaked at an all-time high of $3.09 in September 2021.
Since its peak, ADA is down 74.5% and is trading around $0.789. Recall that Cardano started the year around $1.3 and has fallen nearly 40% from that value amid the ongoing Russian invasion of Ukraine.
It is worth noting that Cardano has a max supply of 45 billion coins and many enthusiasts think the vast volume is a result of the price dip.
Cardano plans to Lure Developers
Meanwhile, the project developers are still looking for unique ways to increase the value of ADA by luring developers into building on the network.
A good number of decentralized applications are in development and are planning to launch on Cardano.