New burn rule of Storepay coin — SPC
Users get rewarded in SPC token everytime when they finish paying off their installments. The reward amount is SPC token equivalent to the 0,5% of the purchase amount, while the SPC token that is burned is 1% of the purchase value.
Users earn SPC tokens as a reward each time they complete their installment payments on time. The reward is calculated as an amount equivalent to 0.5% of the total purchase value, paid out in SPC tokens. Concurrently, we implement a token burn mechanism, where 1% of the purchase value in SPC tokens is burned every 15 days. Users have the option to pay for their installments using SPC tokens. This payment token pool is the primary source for the burning. In instances where this pool does not contain enough tokens to meet the required amount for burning additional SPC tokens will be acquired from the secondary market to fulfill the burn requirement. As a result of this, users are encouraged to complete payments on time to earn rewards, the token’s supply is gradually decreased to potentially increase its value, and the utility of the token in the BNPL system sustains its ongoing demand.
This process has the following benefits:
- Rewards for timely payments: Users are incentivized to pay off their installments on time because they receive SPC tokens as a reward upon completion of their payments. The reward, being a percentage of the purchase value, can be a significant motivator, especially for larger purchases. Timely payments ensure users consistently earn these rewards, enhancing the perceived value of participating in the BNPL program, while keeping the NPL low for the company.
- Token burn reducing supply: The rule that 1% of the purchase value in SPC tokens is burned with each purchase acts to gradually reduce the total supply of the tokens. A reduction in supply, assuming demand remains constant or increases, can lead to an increase in the value of the remaining tokens. This potential for increased value creates a speculative incentive for users to acquire and hold the token, anticipating future appreciation.
- Use of tokens for payments: Allowing users to pay for their installments with SPC tokens creates a practical utility for the token within the ecosystem. This utility can increase the demand for tokens, as users who prefer to use this method of payment will seek to acquire SPC tokens, either through rewards or from the market.
- Burning from the payment pool and secondary market: The strategy of primarily burning tokens from the Payment Pool and purchasing from the secondary market when the pool is insufficient adds another layer of token demand. Buying from the secondary market to fulfill the burn requirement may lead to a direct increase in market demand, potentially driving up the token’s price.
- Controlled circulation and scarcity: Continual burning of tokens reduces their circulation. In a market where the token has a defined utility (like using it for BNPL features), reduced circulation can lead to scarcity, which can increase the token’s value if the demand for its utility remains constant or grows.
In summary, the burn rule, combined with the reward system and the utility of SPC tokens in paying installments, creates a dynamic ecosystem. This synergy between rewarding timely payments and strategically reducing token supply can lead to a sustainable increase in the token’s demand and value over time.
