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WRX 5th Quarterly Burn – What it means & Will WRX Price Go Up?

Burn events are not rare in crypto and often companies decide to lower their token’s circulating supply by removing some portion of it permanently. This in turn helps the asset holders temporarily as the prices tend to go up in the short term. We’ve already covered the past 4 WRX Burn events in one of our articles.

WRX 4th Quarterly Burn Event | Rs 112 Crore worth of $WRX burned | What happens next?

Quick Catchup of the news

Before we start, I got some questions on Twitter asking me about the way a company makes money by burning the tokens. The answer to that question is no. The Company doesn’t make any significant money by burning tokens and it is purely done to give the asset holders a benefit in the short term.

After this Question, I decided to look across the WRX WhitePaper and if you scroll a bit down, you’ll be able to find the page explaining the revenue model of the company. The main source of income for an exchange is the trading fee that users pay to the platform. That being said, the fees on Withdrawal and P2P are negligible and may or may not be a significant income source for the company. We can’t comment on it at this moment but surely, WRX Burn events don’t make money for the exchange.

Credits: WRX WhitePaper

Are Burn events necessary?

To understand this topic, we have to go through tokenomics and frame our opinion. WRX Token initially had a total predetermined supply of 1 Billion out of which, the distribution was as follows,

After 5 consecutive burn events, out of a billion WRX Tokens, 21,786,665 ( 21 Million ) has already been removed permanently out of the supply which cuts its maximum possible limit to nine hundred seventy-nine million. That being said, we know that future burn events will also occur further reducing the circulating supply every quarter.

If you’ve read it so far, then let’s talk about the increasing adoption of Crypto in India. If the masses start using the exchange for buying NFT’s, Bitcoin, Ethereum, etc the utility of WRX tokens will go up even higher. So far, we can use WRX token for

  • Paying Trading Fees & getting a discount.
  • Avail Zero Fees Trading on WRX Market.
  • Buying/Selling NFT’s.

Wait, that’s not all. I heard rumors of AMM launch next month although the news isn’t official. But if that happens we will find one more use-case for the WRX token. The holders will be having the power to avail voting rights and governance for the DEX. That sounds too interesting right!

The Volume of WRX Burned in 5th Quarter.

7,333,333 WRX worth approximately INR 61 Crore ($8.2 million) was burned. You can find the transaction ID using this link,

https://explorer.binance.org/tx/BCD416A6E62C8939C3AF9FE361F35E75A1202474F92F07CD3A778DF244ACB6F5

After this, you’ll ask how can someone burn-off tokens? It isn’t paper that can be burned right !

function burn(uint256 _value) public returns (bool success) {
        require(balanceOf[msg.sender] >= _value);   
        balanceOf[msg.sender] -= _value;           
        totalSupply -= _value;                      
        Burn(msg.sender, _value);
        return true;
    }

This is how the burn function looks. It sends tokens to an irrecoverable wallet address and removes them permanently. Pretty cool right !

I wish if our Fiat Money was also programmable like this. But that’s another topic of CBDC’s for someday else.

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