Step Finance Burns 12.5M STEP Tokens, Embracing Deflationary Model with "THE STEP SUMMER BURN"

Step Finance is making waves this summer with its "Step Summer Burn" program. The initiative kicked off with the burning of 12.5 million STEP tokens in its first week, with plans to burn a total of 50 million STEP over the next four weeks. This significant reduction in token supply, equivalent to 8% of the total supply and 13% of the circulating supply, is a strategic move aimed at fostering long-term value for STEP holders.

The burned tokens were accumulated in the Step fee wallet, which receives 100% of Step Organization revenue through open market buybacks. By removing these tokens from circulation, Step Finance is demonstrating a commitment to creating a more deflationary environment for STEP and potentially enhancing its value proposition.

Furthermore, as the protocol grows and generates more revenue, the value accrual to existing token holders is amplified due to the reduced supply. This stands in contrast to models where new tokens are constantly minted to fund rewards, potentially diluting the value for existing holders.

Exploring Diverse Value-Driven Strategies

The Step Summer Burn program is a prime example of how projects in the crypto space are continuously exploring innovative ways to create and distribute value to their communities. Step Finance already has a staking rewards program in place, further enhancing the attractiveness for holders seeking both immediate and long-term value. While various mechanisms like buybacks, staking rewards, and airdrops exist, token burns offer a distinct advantage in directly impacting the token's supply and potential value. 

For instance, GenesysGo's shdwDrive utilizes 25% of its generated fees to buy back SHDW tokens, which are then distributed to stakers as rewards. This approach aims to incentivize long-term holding and active participation in the platform.

Similarly, Only1, a web3-based Onlyfans platform on Solana, has implemented a revenue-based buyback program to reduce the circulating supply of its token and potentially increase its value.

Solana's High Float, Low FDV Trend

There's a growing trend in the Solana ecosystem to launch tokens with higher circulation and lower FDV. STEP is currently one of the top Solana tokens with one of the highest circulating-to-total supply ratios. This has sparked wider discussions within the crypto community and even caught the attention of Binance, the world's largest cryptocurrency exchange.

Top Solana tokens Circulation supply percentage ( Data by Coingecko)

In a recent statement, Binance encouraged projects with lower to medium valuations and strong fundamentals to apply for their listing programs, implicitly acknowledging the potential benefits of this approach.

This shift in launch strategy is seen by many as a way to create a more inclusive and equitable investment environment. By offering a larger portion of the total supply at launch, often at valuations aligned with earlier funding rounds, these projects allow retail investors to participate alongside venture capitalists on the same floor. This can lead to a more balanced price discovery process and potentially mitigate the risk of price dumps following token unlocks that are common with lower circulating supply models.

Step Finance's Summer Burn program is a significant step towards a more deflationary and value-driven environment for its token holders. By embracing strategies like token burns, aligning with high float low FDV tokens, and implementing a multi-faceted reward structure, including staking, Step Finance is leading the way in more innovative ways to drive value back to the community.

Disclosure: SolanaFloor is owned and operated by StepFinance