Deflationary Tokens | “BURN” Smart Contracts at Work

8 min readAug 25, 2019

27/08/2019

How should we look at and what endless possibilities Smart Contracts can offer Businesses, Human Centricity and Wealth Management.

Let’s recap in Article 1 Blockchain & Cryptocurrency Business | The Toolbox to a Value-Added Approach.
We established a toolbox of guidelines to enter the transition or collaboration between our centralized and decentralized networks.
Our ultimate goal is to run our business with an improved performance saving time, costs and improving our Human Centricity #HX in three key categories Customer #CX, Workforce #WX, and Partner #PX eXperience according to Deloitte with Lindsay Stein’s article Deloitte Digital shines light on the power of human values

Article 2 Blockchain & Cryptocurrency Business | BURN Token the Liquidity Protocol
We established a business case study in a Coal Mining Supply Chain on the Ethereum Blockchain, setting up the keynotes to be addressed and implemented to achieve our vision to Automate our business further with the new technology, Blockchain offers.

Now we need to find out if Blockchain can actually do what it says?

Key factors: Saving Time, Saving Costs and improving the Human Centricity.

We all know that Blockchain Platforms launch their Tokens or Cryptocurrency with a Burn Plan, (A certain amount of Tokens are strategically destroyed or “Burned”). This curbs inflation in their ecosystem and helps drive the value if they can keep the interest in their project growing.

We, on the other hand, want to create an ecosystem where the payment mechanism in our business transacts on another level of automation, is instantly verified and ready for auditing, saves time in administration duties and paper costs. Our business offers a borderless settlement value across various platforms to maximize our business goals.

Financial Impact:

1) Ownership: At the core of your Blockchain plan needs to lie a Smart Contract plan on how you wish your funds to transact and which benefits you wish to draw from it.

2) Settlement: How you want your local infrastructure to react with the external settlement.

3) Safety: How you wish to secure the transactions on different levels.

Our case study is The BURN Token. The Burn Token automates this process of Burning Tokens by being a Deflationary Token that Burns 1% of the Token with every transaction. This automation is written within a smart contract on the Ethereum Blockchain and has been audited by Callisto Network

The transparency of Blockchain is phenomenal. Any transaction on the Ethereum blockchain can be viewed on Etherscan. This does not mean the identity of the transaction is exposed, but rather reveals valuable information in the settlement process to maximize the movement of our Digital Currencies. Several new features have also been added to test Reward and Loyalty possibilities.

Let’s look at our Coal Mining Supply Chain Business from Article 2 Blockchain & Cryptocurrency Business | BURN Token the Liquidity Protocol

Saving Time & Saving Costs

Let’s make this simple to understand and add an infographic. I’ll explain BURN Token first and then we can do our hypothetical Coal Mining Supply Chain Business, COAL.org

BURN Token

1) The more transactions BURN makes the more gets destroyed, the more the value rises because of its inherent scarcity.

2) As a business community or even right down to individual team members, we want to ensure the stability of our company, partners and or teams investment. Here let’s decide to take half of the BURN and Stake it in the BURN/ETH Pool. This is a win, win as we now have ETH and BURN Staked proportionately. By doing this we are diversifying the company’s investment and providing Proof of Liquidity which is essential to the platform’s success.

3) The Smart Contract is now diversified in the best interest of the community, team or individual. A secondary Token is created to reward Pool participants automatically every day with our new Token called CINDER (CNR). CNR also has a created value and therefore it is possible to use CNR as any settlement or buying back power of BURN, (Transactions = 1% Burned)

This is where possibilities really open up for the Business. CNR is created daily from the amount of BURN/ETH Pooled. If we are predicting some market instability we can, for instance, send the CNR created buy Ethereum, BURN, DAI (Stable Coin) or any ERC20 Token to ensure stability. Here Ethereum provides us with products like DAI/ETH V1 and Uniswap V1 Pools. In short, Arbitrage enabled automation A must-read on Uniswap Doc’s

4) The balance of the 50% BURN is being used in the business for our day to day purchasing and payments transaction. Now here we introduce our Tertiary Token ASH (ASH) for rewarding participants in a Loyalty program. This basically means if you are doing business with us or if you join our community to purchase or pay for services rendered, you will be rewarded for keeping and using BURN, (again remember every Transaction of BURN = 1% Burned) to ensure the BURN Value continuously rises.

These two added value Tokens can be viewed in any contribution term depending on the business or individuals goals and needs.

Now let’s look at our Business example COAL.org

Main Token COAL, secondary TRADE, tertiary HODLE. Just to make sure you understand we are now going to look hypothetically at how these three tokens COAL, TRADE & HODLE that were built on the Ethereum Blockchain for our Coal Mining Operation can fit into a strategic business plan to ensure an improved business model on a Blockchain.

1) Transactions in our Coal Mining Business is obvious. We have introduced our Partners, Suppliers, Workforce, and Customers to COAL. Everyone is briefed on the mechanics of our Deflationary Token concept and understands it is in all parties best interest to do business inside our Platform Ecosystem.

2) COAL Token is pegged with the actual Coal Price and is used in our day to day business for paying wages, purchasing inventory and all normal settlement functions. COAL is easily swapped and or exchanged between Ethereum, DAI, USD, EUR, etc. for external elements not yet integrated with the COAL Platform. They will obviously not benefit from the Reward or Loyalty programs.

3) The Coal is extracted from our Mines and Trade negotiations is put into place. Metrics include The Coal Price, Shipping Port Rates, Expected Time of Delivery. (Remembering our COAL Token is increasing in value with the transaction being made). At this stage, we introduce our Secondary Token TRADE.

4) Our business has been verified Liquid by the size of our investment in the Liquidity Pool. The Liquidity Pool is on the Ethereum Blockchain and governed by a strict set of Community initialized rules to ensure stability and healthy investment fundamentals. TRADE is rewarded to all investors, partners, suppliers, customers, and staff because of the COAL Token Protocol, on a daily basis.

TRADE holds perfect Arbitrage opportunities here with BURN and the V1 Pools, especially when entering trade contract agreements and the reality of price fluctuation and variable port fees. Our COAL Token is pegged with the Coal Price and therefore when entering V1 Pool functions the Arbitrage power, COAL increase in value and Rewards program via TRADE outperforms any possibility of negative price fluctuations, ensuring price specific delivery and a healthy Coal.org economy.

5) Our Tertiary Token HODL is our Loyalty program. Here a marketing strategy in various categories can be launched to incentivize the purchase and using of COAL, again circling back to the Value-added drive of COAL.

In our Smart Money Business, we have automated work functions even further, putting Smart Contracts at work to maximize the Value Chain. With the value-added Digital Currencies that incentivizes us using it, it can only mean healthier economies and improved wealth distribution.

Next, we will be exploring a Business Plan using the BURN Token metrics and the endless possibilities that lie within.

Morne Olivier #morneolivier

Freelance Writer | Content Creation and Digital Media Marketing for Blockchain Technology | Let me help you Create Content

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Glossary:

1) Smart Contracts on Decentralized Blockchain Networks.
What is a smart contract?
By definition smart contracts are strings of code that directly control the transfer or distribution of funds, (Digital Currencies).
This can happen between two parties or as broad as corporations. These transactions are stored securely in a chain of blocks, on an immutable ledger, called the Blockchain.
Basically, current ledgers are very Labour Intensive and very much prone to human error and manipulation of entered data. Blockchain is not and simply reduces the risks and costs.

Secondly, we have to understand the “Token” in this value chain.
2) A Token, Coin, Cryptocurrency or Digital Asset is basically all the same thing and is created via a Smart Contract to perform the functions the creator/s set out for it to do. The main function usually a form of payment, reward or store of value or data. Tokens are more specifically created inside a particular Blockchain business and Cryptocurrencies mostly have the ability to be cross-platform trading mechanisms where added value is created. There’s a hierarchy in functionality and boundary of use.

Different use cases for Smart Contract Digital Money (“Money” written in coded terms on a network)
Smart contracts have been developed to suit the need of the company and its goals. The code can be open source and available for further creativity.

Reference:

The Burn Token

https://theburntoken.com/

Choosing an Enterprise Blockchain

https://medium.com/swlh/choosing-an-enterprise-blockchain-an-exhaustive-guide-749ba7db382c

“Kyber Network Ecosystem Report #5” by Deniz Omer

https://link.medium.com/tq55EmBofZ

Stable Coins

https://media.consensys.net/the-state-of-stablecoins-2019-40c3eca990f4

Liquidity

https://www.trustnodes.com/2019/08/09/half-a-billion-dollars-worth-of-bitcoin-and-ethereum-now-locked-in-defi

Smart contracts