Justin Sun, the founder of Tron, announced the introduction of the buyback model through his social media channels, emphasizing that the decision was made with community consensus. The community proposed burning liquidity pool (LP) tokens, a method already used by popular projects like Shiba Inu.
According to Sun, the advantages of this approach include:
Increasing the depth of token liquidity;
Utilizing burned liquidity;
Enhancing compliance with market requirements.
However, despite these benefits, Sun noted that explaining the entire process can be complex and might lead to misunderstandings among community members.
In his view, the buyback model is a more effective and transparent alternative to simple token burning. It allows projects to manage the token supply in the market to increase their value, with all burn records stored on the blockchain. This simplifies verification and eliminates the need for complex explanations.
SunPump has already transitioned to the buyback model, a move recognized within the crypto community. However, Ben Todar, the founder and chairman of Chainscard, expressed concerns that an excessive focus on buyback and burning might distract the SunPump team from other important aspects of project development. He called for a more balanced approach, highlighting the importance of adding liquidity through LP tokens, which not only increases market depth but also attracts large investors.
The implementation of the buyback model is just one of several innovations introduced by Justin Sun in recent weeks. Other initiatives include reducing fees, increasing energy consumption limits, and plans to create a new project using non-fungible tokens (NFTs).
The post first appeared on HTX Square.
