The MDB Conundrum
There's a weird thing going on with tokens. I'll call it the MDB Conundrum where MDB stands for mint, distribute, burn. It goes like this:
Burning tokens is a bit of a curiosity to me and it seems to be a major selling point in places. But, I'm not sure I get it. Here's how it goes:
- Tokens are coined.
- They are distributed.
- And, then they are burned.
Maybe I'm wrong, but that third part appears counter to first two. Burning tokens seems counter to minting and distributing them.
As I understand, the point is to limit supply as a counter to inflation. I get that. But, it seems like a dog chasing his tail...mint coins, distribute coins, oh that's too many, let's burn some, now mint some more and distribute them. Oh wait, let's burn some. Let's burn some more. Hey, we're adding value to the the ecosystem by burning tokens! Let's mint and distribute a bunch more and them burn most of them too!
The Mint-Distribute-Burn Conundrum.
